{"id":36401,"date":"2022-01-08T08:06:02","date_gmt":"2022-01-07T19:06:02","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=36401"},"modified":"2022-01-08T08:06:02","modified_gmt":"2022-01-07T19:06:02","slug":"will-interest-rates-rise-in-2022","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/will-interest-rates-rise-in-2022\/","title":{"rendered":"Will interest rates rise in 2022?"},"content":{"rendered":"

PHOTO: The IMF says there is a case for a formal review of the Reserve Bank.<\/strong><\/p>\n

Chatter about rising interest rates<\/a> is set to slow property price growth in 2022, although the cash rate is expected to stay on hold until late in the year or 2023, economists say.<\/p>\n

After years of ultra-low interest rates, slashed to near-zero to support the economy through the pandemic, the next move is likely to be up.<\/p>\n

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Will rising interest rates mean house prices still continue to rise?<\/a><\/h2>\n<\/header>\n<\/div>\n
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Retail banks have already been increasing fixed mortgage rates but all eyes are on the cash rate. Photo: Ryan Stuart<\/strong><\/em><\/figcaption><\/figure>\n

The timing will be closely watched, and could come earlier than the Reserve Bank\u2019s previous cautious suggestion of 2024.<\/p>\n

ANZ expects the first hike in the first half of 2023, Westpac tips February 2023, NAB says mid-2023, while both CBA and AMP Capital predict November 2022.<\/p>\n

Retail banks have already been increasing fixed mortgage rates from their trough below 2 per cent to cover their costs, but an official hike \u2013 likely the first in a series \u2013 will\u00a0reduce borrowers\u2019 budgets at auction.<\/p>\n

ANZ senior economist Felicity Emmett said fixed rates could rise a little further before stabilising, after three-year rates rose more than 80 basis points over the last few months of 2021.<\/p>\n

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The Reserve Bank will be patient before lifting the cash rate. Photo: Louie Douvis<\/strong><\/em><\/figcaption><\/figure>\n

\u201cThe days of sub-2 per cent mortgage rates are over for the time being,\u201d she said.<\/p>\n

\u201cIt will mean that we do continue to see this slowing of house prices, and that\u2019s why eventually we think that by 2023 prices will start to turn down.\u201d<\/p>\n

The Reserve Bank wants to see a sustained improvement in wages growth and inflation before it lifts the cash rate, as moving too early could derail the economic recovery.<\/p>\n

Ms Emmett expects this won\u2019t be until the first half of 2023, but not everyone agrees.<\/p>\n

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