Will inward migration continue to underpin housing demand? Will the dampening impact of the LVR restrictions be long lasting? Will the supply response soon start to have a moderating effect on house prices? Will home owners increase their spending out of capital gains? And how will rising mortgage rates affect spending by borrowers?
4  BIS central bankers’ speeches  With regard to this last question, we expect that interest sensitivity will be greater now than during the last tightening phase in 2003–2007. First, most New Zealand mortgages are currently on either floating or relatively short-term fixed rates whereas in 2003–2007 the bulk of mortgage borrowers were on 2-to-4 year fixed rates.