Last week’s Property Buzz poll asked the question will more rate hikes this year hurt the property market? According to our exclusive property blog poll 67% of our users voted that it could possibly hurt the market as it is still unstable. Followed by 17% voting that an increase in rate would hurt the property market and 16% that it would not affect property market because market conditions are too strong.

With the bulk of people voting that they are not sure of the effects of further rate hikes, it is a clear indication of uncertainty in the market still.

According to HIA’s chief economist Harley Dale, figures show that sentiment towards buying new homes begins to falter when mortgage rates hit their 10 year average of 7.25 per cent.

Even with the another rate rise, the variable rate on the average mortgage is still significantly below that mark

The strength of the underlying demand stemming from the shortage of housing plus ongoing population growth means the property sector should be able to absorb another rate rise.

On the other hand another rate rise will affect discretionary spending, especially if it occurs before Christmas

We have a long way to go before the retail sector is back to normal and consumers are sensitive to rate rises.

This time last year, there were cash handouts washing through the economy, which helped prop up the retail sector leading into Christmas.

This time around, retailers are relying on the fundamentals of the economy.

With unemployment and interest rates forecast to continue to climb, the outlook for the retail sector could still be rocky for the next 18 months. However, the property market still looks strong.