Housing data brings fears of interest rate hike

Published: 10:06AM Monday October 26, 2009 Source: Newstalk ZB

The latest housing market data has added to concerns the Reserve Bank will be forced into interest rate hikes, sooner than it expected.

The BNZ home loan affordability shows rising house prices and higher fixed mortgage rates.

Together, they have pushed affordability back to its worst level since late 2006.

Interest.co.nz editor Bernard Hickey says it is likely to have an impact on what the Reserve Bank does to the official cash rate.

He says the six to 12 month and two year rates are rising.

Hickey says this puts a question mark over how long the Reserve Bank will be able stick to its commitment to keeping the OCR down.

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