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.
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