This following a record 11 interest rate rises
More than half of New Zealanders (54.1%) are “worried about interest rates at the moment” – up from 34.6% in June 2021 and an increase of nearly 20% points in only 18 months, new Roy Morgan research showed.
The market research company revealed the result following a record 11 interest rate hikes by the Reserve Bank in just 18 months, from a record low of 0.25% in October 2021 to 5.25% by April.
Michele Levine, CEO of Roy Morgan, said the rapid series of interest rate rises by RBNZ over the last 18 months is clearly hitting mortgage holders more than others – and this is set to be a key election issue in mid-October.
“A look at concern about interest rates by housing category reveals that, unsurprisingly, the rapid set of interest rate increases since late 2021 is hitting New Zealanders with a mortgage harder than anyone else,” Levine said.
“Now nearly two-thirds of New Zealanders who are paying off their home, 63.3%, say they are ‘worried about interest rates at the moment’ – up from a low of only 21.6% in March 2021. This is an increase of over 40% points in a year-and-a-half – and the RBNZ has raised interest rates even further since the end of last year.
“Although New Zealanders with a mortgage are already the most concerned about the rising interest rates – which have increased from a record low of 0.25% in October 2021 to 5.25% today – there is reason to believe the full impact of the interest rate increases already taken has yet to truly be felt.”
Renters and homeowners also became increasingly concerned about interest rates – but at a much lower rate. Now 50.1% of renters and 49.2% of homeowners said they were worried about interest rates.
With only around 10% of mortgage debt being floating (or variable), there’s still quite a lot of people on fixed-rate loans who are yet to roll over onto much higher mortgage rates, Levine said.
“The latest Roy Morgan New Zealand Poll for April shows that the New Zealand election later this year is currently on a knife-edge with neither a potential National-Act NZ coalition (44.5%) or the current Labour-Greens governing coalition (42%) looking likely to secure a majority of seats at this year’s national election,” she said.
“The sensitivity of many New Zealanders to further interest rate increases is growing and whichever party can offer a compelling policy to those hit hardest with rising inflation and interest rates stands a good chance of winning this year’s election.”
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