RBNZ Deputy Governor Christian Hawkesby says the only impact from higher interest rates so far is falling house prices and a cooling construction pipeline

That looks to be a close as one can get to saying "Get Ready. We are going higher"

By cooling construction pipeline do they mean zero degrees Kelvin?

Dear lord these people need to get out of Remuera and go chat with folks at the coal face...

I wonder if they have been down to the basement to try the water machine.

Give the interest rate tap six quick turns clockwise and see if they have cavitation anywhere else.

Or are they going free style.

They're idiots. They'll overcook it for sure- because they don't know how to talk to the coalface, and actually forecast what is going to happen, rather than wait for the data to appear in the rearview mirror.

Hawkesby, also a member of the Reserve Bank's Monetary Policy Committee, notes that 50% of banks' mortgage books are yet to roll over since the central bank started increasing the Official Cash Rate (OCR), meaning some borrowers will reset fixed mortgages at 6.5%, up from 2.5%.

So what's the point of aggressively hiking the OCR further, don't they just need to sit back & wait...or do they want that 50% of mortgage holders to be smashed by the time they refix.

The Inflation problem we have today hasn't just arrived. It's been decades in the making. At every event of financial instability, rather than keeping Risk where it should reside - in the price of Debt - Risk been transferred into Asset Prices. Negative Real Interest rates are at the heart of the problem, and correcting that is going to take time, courage and be economically painful.

One way or another, Nominal Interest Rates have to get above the Inflation Rate. We can do it quickly or drag the whole process out; arguably making it worse in the process. To the credit of the RBNZ they started earlier than most of their peers down the road to correction, and if they have erred at all it was in not going hard-and-fast at the start; jacking the OCR up to, say, 3.5% a year ago, stopping CPI prints hitting the 7's.

If they have learned anything, it's that what they did, hasn't worked out as planned. So expecting them to 'stand back', again, as they did a year ago, and wait for CPI to fall back, so Nominal rates 'catch up' with Inflation would be risking getting it wrong all over again. How will they look if CPI hits 15%, and they still haven't attempted to get out ahead of it?

That courage they need to correct the situation is in plain sight. It became most clear with the "The Recession we have to have" announcement. And now with this, 'we have more to do'. They know it. In fact, we all do.

So the sooner we get it out of the way, the better.

Pressure: pushing down on me

Pressing down on you, no man ask for

Under pressure that burns a building down

Splits a family in two

Puts people on streets

That's OK

That's the terror of knowing

What this world is about         (David Bowie ,Queen ) 

 Not sure why anyone would think a recession is the best course forward.... Good Luck with that ... SLEDGEHAMMER....lol

337 billion in total mortgage debt. So assume by 50% of the book they mean 168 billion is yet to be repriced at rates 4% or more higher than they were fixed at. That will extract an additional 6.7 billion a year from the New Zealand economy. 

The majority of people will ignore the interest rate reset until it happens. They will then pretend it didn't happen for another month or so. Then they will freak the F out.

RBNZ quickly becoming an international laughing stock. Hiking rates to kill demand in the current environment will only reduce house prices. Most of our prices are not sensitive to reduced demand, and tourist spending is replacing falling domestic demand anyway. Madness 

50% to rollover by 2023?

I distinctly remember an earlier article reading 70% of New Zealand mortgages to rollover by November 2022....

Maybe that was Opespartners. 😅

These clowns have already gone too far. The residential housing industry has come to more or less a standstill since about September. As the current projects get completed, there is a HUGE hole awaiting in the industry in 6 - 9 months time. That is a lot of people that will only be cutting back on discretionary spending, but also not able to pay for the basics, as there will be huge job cuts in the industry. 

Can they really not see that coming? I don't understand what the end game is here as currently seems like they are steering the ship into the rocks. 

Inflation is around 7% normally OCR would be above inflation rate this has been out of kilter for some time, many people have taken advantage of emergency low rates which has pumped up house price’s and inflation. Why would banks continue to lend money with lower rates than inflation effectively losing money. Now and over coming years having established billions of dollars in mortgages this will be the time to drain the people dry. That million plus 3 bedroom box people purchased rather than paying interest of 30k it is now 65k per annum and climbing, many people will end up in huge financial difficulties with no way out as house price’s will continue to tumble.

Every tightening cycle always see the Reserve Bank tighten by more than it indicated it would at the beginning of said cycle.  This is true of other central banks too. And so come the phrases:  "we have more work to do", "inflation has proven stronger than we expected", "the economy has proven stronger than we projected", "the labour market remains unexpctedly robust" and all the other little gems that central bankers like to pull out of the hat!

"There's more work to be done, and when we get back to the office in February, we'll get on with it"

"Work" hah bankers aye