Not surprisingly given how much they've risen over the past 18-months or so, a growing number of New Zealanders are worried about interest rates, market research company Roy Morgan says.
In the year to June 2021 just over a third of New Zealanders, or 34.6%, were worried about interest rates, Roy Morgan says. This increased significantly to 54.1% in the year to December 2022, an increase of 19.5% points, or 56.2% in 18 months.
“A look at concern about interest rates by housing category reveals that, unsurprisingly, the rapid set of interest rate increases since late 2021 is hitting New Zealanders with a mortgage harder than anyone else," says Roy Morgan CEO Michele Levine.
“Now nearly two-thirds of New Zealanders who are paying off their home, 63.3%, say they are ‘worried about interest rates at the moment’ – up from a low of only 21.6% in March 2021. This is an increase of over 40% points in a year-and-a-half – and the Reserve Bank has raised interest rates even further since the end of last year."
As it strives to combat consumer price inflation that has risen to heights above 7% which haven't been experienced in more than 30 years, the Reserve Bank has increased its Official Cash Rate by 525 basis points to 5.50% since starting from a record low of 0.25% in October 2021. The average bank advertised two-year mortgage rate is now at 6.523%, up from 2.53% two years ago.
With most New Zealand mortgage borrowers choosing fixed-term, rather than floating, mortgage rates, the impact of higher rates is still flowing through to borrowers' finances.
% of New Zealanders who agree “I’m worried about interest rates at the moment”
% of New Zealanders who agree “I’m worried about interest rates at the moment” by housing category
Charts source: Roy Morgan Single Source, January 2018 – December 2022. Base: New Zealanders aged 14+, 12mma results and n= an average of 6,506 interview for each 12 month period.
52 Comments
An issue across the anglosphere where we have loaded up with far too much debt.
Interesting chart on the situation in Canada where their private debt levels exceeded Japan before their epic bubble burst back in the 90's.
https://pbs.twimg.com/media/Fi1c7bUXEA4bV2n?format=jpg&name=small
Agree with you, King of the whiners.......
That NZers are worried about interest rates is something I can't believe. A huge surprise, indeed. How could it possibly be⁉️
With such a shock revelation now being relayed up and down the country via megaphones, many will suspect there's been an error in the analysis. Things just don't add up.
Prepare for a Palace Uprising......
TTP
Boomers who have all their savings in bricks and mortar should be worried about interest rates. Their 'savings' will be disappearing. This has a psychological impact on their spending behaviour as they may not feel as rich today as they felt yesterday. This is a vicious circle as less spending into the economy also negatively impacts house prices.
Similar issue in China right now.
Paper becomes vapor. Not a capital gain until its in the bank post settlement.
Only thing that remains is the debt. Now a funny thing about the debt. If the debt is 'written off', there's really no drama. It all came out of 'thin air' anyway. But what is really lost is the 'asset' (ownership of the debt obligation).
From Middle English broker, brokour, brocour, from Anglo-Norman brocour (“small trader”) (compare also abroker (“to act as a broker”)), from Old Dutch *brokere (“one who determines the usages of trade, manager”), from broke, bruyck, breuck (“use, usage, trade”), from Proto-West Germanic *brūkī (“use, custom”), from Proto-Germanic *brūkiz (“use, custom”), from Proto-Indo-European *bʰruHg- (“to use, enjoy”), equivalent to brook + -er.
https://en.wiktionary.org/wiki/broker
Not what you implied, right?
Maybe but high interest rates will also reduce house prices, I am far more worried about house prices for my kids than interest rates which are not even close to historic norms. With high interest rates you can at least save for a house.
People bought at ridiculous prices because insanely low interest rates allowed them to do so, its sad that people are suffering but it has to happen in order for house prices to come back down to earth.
Did this really fall by 40%?
https://www.oneroof.co.nz/news/43726
If so, someone has just taken it right up the Oxo tower.
Such an absolutely ridiculous article as well, portraying that the market is "hot" and so many bids... In a less f+++++ world the headline would read, "Market Crash as Developer loses 40% in 3 years"
Yep - absolute spruiking by OneWoof
Have you noticed how you now get 3 spruiking stories in the top 20 news articles on your Herald App?
New stories appear throughout the day and move down the page but the OneWoof stories remain in the same place
If anyone thinks OneWoof is even close to balanced, unbiased, or impartial, consider this story they ran in 2019 with the headline: Bargain time! London property prices are crashing
https://www.oneroof.co.nz/news/bargain-time-london-property-prices-are-…
House prices in London dropped 4.4 per cent in the year to May - which means that more than £21,000 was wiped from the value of the average London home over the 12 month period.
4.4% down in a year!
Prices are have been falling solid here for 12+ months, values are off 20%+ here in many places and we hear nada, zero, nilch from OneWoof about a crash
The place should be a crime scene for the NZ Media Council
I counted no less than FIVE Oneroof propaganda slots in the NZHerald top20 links on Wednesday. It was so blatant I took a screenshot for future reference. 1x sponsored ad + 4x property puff pieces.
1 Mortgagee frenzy: Bargain hunters push price of South Auckland home to $1.2m
2 Tony Alexander: The towns investors should be targeting before prices start to rocket
3 'We're seeing supply dry up': Act now or face a 3 year drought, buyers warned
4 Q&A: Will NZ house prices bounce back like AU? Sellers across the Tasman are sensing the good times are back.
Sadly - it might well work and fool a few sheeple.... propaganda is a powerful weapon, but it’s hard to see how the market can turn or rally on a dime when test rates are still 8%+ plus
Or it could backfire if it motivates and restores confidence in vendors to hold out for their inflated prices believing a sellers market is returning… and as such stall the market even further
As I said earlier this week, that Nikki "spinster" from One Goof is a spruiker for RE agents ... Who pay her wages.
Take this example. Listed at 995k, passed in at auction today and now at 789k ...
https://www.trademe.co.nz/a/property/residential/sale/northland/whangar…
There are 2 more this week in the same area that dropped 200+k this week to get an urgent sale.
6 Onley Crescent and 16 hoihere place.
Talking to the Agents, they say the sellers are wanting out asap.
It's crashing very fast now up north. The bottom is not here yet .. the sellers have blinked!
I like the term "burnout economy" - one foot on the gas, one foot on the brakes..........
https://www.macrobusiness.com.au/2023/06/australias-burnout-economy-car…
“A look at concern about interest rates by housing category reveals that, unsurprisingly, the rapid set of interest rate increases since late 2021 is hitting New Zealanders with a mortgage harder than anyone else," says Roy Morgan CEO Michele Levine.
The German property bubble, which I predicted in 2009 would begin, has ended. Made unavoidable by the German gov't's policies. After bubbles, property prices tend to fall 80% from peak. Takes several years. As I've said, this will take down the banks, forced into property by ECB Link
Given the percentage of our so called wealth that’s tied to property (lots of it being crap) we should collectively be shitting bricks right now. Meanwhile the most important distraction is some obscure cabinet minister and a few penny stocks. What a backwater we’re becoming.
Being told 12 times to sell the shares, promising to do so and then not doing, that’s a sackable offence. Either incompetent or lacking integrity.
As a govt minister, he has to be whiter than white. How do you expect people to follow the law if you won’t follow parliamentary rules?
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