Higher interest rates for borrowers are already starting to bite, with the prospect of further mortgage rises underscored by the recent rise in the Official Cash Rate.
The Reserve Bank unexpectedly increased the OCR last Wednesday from 5.0 per cent to 5.25 per cent, citing strong domestic and world growth as the reason.
Real Estate Institute President Max Oliver said it was unfortunate that the New Zealand homeowner would bear the brunt of the RB's push to control inflation. Residential sales volumes are already down on the back of rising mortgage rates: December's tally of 4,710 was well down on the 6,661 sold in November and 6,170 in December 1998.
However, Oliver said that this showed "high caution" rather than an unwillingness to enter the market, as the Institute's members were still getting a substantial number of enquiries from potential homebuyers.
Dwelling sales for December 1999
| | Total number of sales | Total value of sales | | --------------------- | ------------------------- | ------------------------ | | Northland | 134 | $23,050,300 | | Auckland | 1,452 | $408,876,786 | | Waikato/BOP/Gisborne | 748 | $130,861,423 | | Hawkes Bay | 204 | $28,442,200 | | Manawatu/Wanganui | 244 | $27,005,214 | | Taranaki | 133 | $15,199,290 | | Wellington | 611 | $125,929,262 | | Nelson/Marlborough | 182 | $30,114,700 | | Canterbury/Westland | 656 | $104,645,411 | | Otago | 263 | $27,346,370 | | Southland | 83 | $9,730,732 | | New Zealand total | 4,710 | $931,201,732 |
Figures from the Real Estate Institute of New Zealand
