Rate rises hurt home buyers starting out, says broker
Steep interest rate rises are locking first-house buyers out of the market, an Auckland-based mortgage broking firm says.
Monday, September 20th 2004, 9:29AM
by The Landlord
William Cairns, an owner of Greenlane-based Cairns Lockie mortgage bankers, lashed out at the Reserve Bank for increasing the official cash rate, saying those suffering the most were people on lower incomes searching for their first place.
"The Governor of the Reserve Bank, in his move to slow the economy, is actually hurting a group that wants to purchase an owner-occupied property," Mr Cairns said.
But bank governor Dr Alan Bollard has made it clear his moves are more an attempt to stamp out inflationary pressures than target any one group.
"Domestically, the economy is heavily influenced by housing activity, which we expect to continue to slow over coming months," Dr Bollard said last week when he pushed up rates.
"However, if that weakening is delayed, then household spending would continue to expand at a rapid rate, fuelling inflation pressures."
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