Biggest bank says home ownership benefits being absorbed by costs more than in past
Expect house prices to end the year 1 percent below where they started and to rise 2 percent next year, economists say.
ANZ economists have found that the benefits of owning a home are being outweighed by the costs, both in mortgage interest and other expenses. House prices are predicted to remain flat in the current year but may decline slightly, with a slight increase expected in the following year. Rising interest rates, political uncertainty, and potential new housing taxes are contributing to this trend.
The central bank is expected to raise its policy rate to 3 percent over the next two reviews, with longer-term rates facing pressure from global interest rate hikes. Despite this, there are still decisions to be made for borrowers with new mortgages or upcoming rollovers, as the difference between short and long-term rates has narrowed.
However, those seeking certainty may find two-year rates to be a reasonable option, while those concerned about borrowing costs would need to weigh the benefits of a 5.5 percent rate against the expected OCR peak.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
