Last week, ASB released its Housing Confidence Survey, which showed that Kiwi “housing confidence has finally cracked”, with confidence collapsing to a 13-year low in response to rising mortgage rates and heavy price falls:With the housing downturn now plain to see, and house prices around 8% off their peaks, confidence is finally crumbling. ASB also warned that the full impact of the Reserve Bank of New Zealand’s (RBNZ) aggressive interest rate hikes have yet to be felt. In turn, household consumption will slow over the next two years:The impact of rising mortgage rates will continue to build into next year, given the lags as fixed-term mortgage rates need to be rolled onto new rates… We expect consumer spending volumes will be quite flat for much of the next 2 years. That is when the impact of the RBNZ’s aggressive rate hikes will truly be felt. Many Kiwi households will also be thrown into negative equity following heavy house price falls.

Source: New Zealand Herald August 31, 2022 07:33 UTC