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The Guardian - AU
The Guardian - AU
World
Eva Corlett in Wellington

New Zealand the ‘kiwi in the coalmine’ as house prices slump and repayments rise

Hilly housing development in Wellington, with farmland in the distance
Borrowers who took out large loans at low interest rates are facing a financial shock as repayments climb. Photograph: Xinhua/REX/Shutterstock

Sharply rising interest rates could put huge financial pressure on New Zealand homeowners who bought at the peak of the country’s overheated housing market, economists have warned.

Experts say New Zealand has become the “kiwi in the coalmine” for the world’s property markets, as rising interest rates and falling house prices put some borrowers at risk of negative equity, where they owe more on their mortgage than their house is worth.

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