Report: Recent borrowers at risk

Recent borrowers are most exposed to rising interest rates and declining house prices, as a larger correction in the property market remains a possibility, the Reserve Bank says in its latest financial stability report.

The half yearly report said New Zealand’s financial system was well-placed to support the economy and remained ‘‘robust’’ in the context of significant global economic challenges.

Key challenges facing the economy include rising interest rates and inflation, house prices above sustainable levels despite recent declines, the ongoing effects of the pandemic and Russia’s invasion of Ukraine, it said.

‘‘Some recent mortgage borrowers could face difficulty servicing their debts,’’ it said.