The financial markets have now fully priced in an official cash rate rise on December 8 and more to come after that too, while more economists have conceded the Reserve Bank of New Zealand won’t sidestep its next chance to tighten further.
“The RBNZ is keen to get its message across that debt-fuelled spending will end by hook or by crook,” Westpac chief economist Brendan O’Donovan says.
“It will not see the strong wage and employment growth as helping curb households’ appetite for credit,” he says.
Westpac now believes the central bank is highly likely to increase rates next month. “Beatings will continue until morale declines,” O’Donovan says.
Employment grew 1.3% in the third quarter and the unemployment rate fell to 3.4%. The labor cost index showed a 0.8% quarterly rise for private sector ordinary time wages, the highest quarterly growth rate since the series began.
Lenders continued to raise their home loan rates in large numbers in the last week and early this week.
Variable rates range from Superbank’s 8.3% to NZ Mortgage Trust’s 9.5%.
One-year rates now vary from the 7.6% offered by Southern Cross to 9.0% from GEM Home Loans.
For two-year fixed terms, Loan Plan’s 7.55% is the lower part of the range, while the 8.75% shared by Westpac’s capped rate, Headstart and GEM Home Loans is the highest rate.
Three-year rates range from the 7.55% offered by Loan Plan to Westpac’s capped rate of 8.85%.
In the five-year part of the market, rates vary from 7.4% offered by Housing Corporation and Loan Plan to GEM Home Loans’ 8.5%.
| « LJ Hooker gets into mortgage broking | Pero under takeover offer from NZ Finance » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved