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Expert warns massive interest rate hike could make housing market 'fall over' Newshub 4 hrs ago © Video - The AM Show; Image - Getty Images Mark Riggall on The AM Show. A financial expert doubts the Reserve Bank is going to raise interest rates too much despite growing inflation, because it'll destroy the housing market. Interest rates are at record lows, driving up house prices and making it cheap to borrow. They were already relatively low, encouraging spending in the post-global financial crisis years, but fell to 0.25 percent as COVID-19 hit last year. As a consequence, house prices ...

Riggall said with prices so high, many recent buyers are stretched to their limits already. "If interest rates rise, if you're borrowing against the median home in New Zealand and rates rise 1 percent, that could cost you more than $4000 a year in extra repayments. For some people it's going to be difficult - bear in mind that other costs are going up as well." Based on long-term fixed mortgage rates, Riggall said the banks appear to be expecting a rise of about 0.4 percent in the next 12 months. But whether the Reserve Bank will go further than that remains to be seen. 

Why the New Zealand sharemarket is heading south 19 Feb, 2021 04:00 PM 6 minutes to read The New Zealand sharemarket is down 7 per cent this year. Photo Greg Bowker After a stellar performance in 2020, the New Zealand sharemarket has underperformed other markets so far this year by quite some margin. The local market's S&P/NZX 50 index finished the year at 13,092 – up 14 per cent on the substantial lift in the previous year. But since early January the index has dropped by 7 per cent. Read More Australia's ASX200 has done better, firming 3.4 per cent. Softness in the local...