He says it means borrowers will be paying more for their mortgages and are going to have to divert more money towards paying them, and some buyers may not be able to access as much home finance as before.

He feels that already some property deals have started to “get a little stuck”.

“Buyers are just pulling back a little, but vendors are not budging on the asking or reserve price.”

The increase comes hard on the heels of regulatory changes, such as tighter loan to value ratio rules and the phased removal of interest deductibility for investors.

He says today’s OCR rise looks likely to be followed up with another 0.25% increase at the last meeting for this year on November 24th, taking the OCR to 0.75%.

Thereafter, the RBNZ’s latest projection is that the OCR could rise to around 2% by the second half of 2023.

He says: “For the property market, the clear implication from this is that the rise in mortgage rates that’s already under way has much further to run, which could also be amplified, or mitigated, by other factors, such as changes in offshore financing rates.”

He says there will be a “tricky period” to negotiate.

“Our view is that sales activity and price growth are close to (or at) a peak, and that both will ease for the rest of 2021 and into 2022.

“However, with unemployment low and in the absence of a GFC-style credit crunch, a full-on property downturn still seems unlikely – especially since the expected end point for interest rates will still be low by historical standards.”