Our view that the OCR is likely to remain on hold until August 2019 suggests that floating and shorter-term fixed mortgage rates should remain relatively stable into 2019. We expect forthcoming monetary tightening in NZ to be modest in relation to historical norms, which should cap the degree of uplift in local short-term rates.
The risk is that mortgage interest rates move up sooner (and by more) than what we expect. The catalyst could be the OCR moving up earlier and faster that what our forecasts assume, or the lift in global rates feeding though into higher local longer-term yields sooner than expected
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