Newshub-Reid Research poll finds majority Kiwis back Government revisiting Capital Gains Tax

Homeowners, you're about to start feeling the pinch with mortgage rates are on the rise - but the value of your house could be set to take a tumble.

The Reserve Bank hiked the Official Cash Rate (OCR) on Wednesday and is now predicting house prices to drop by 9 percent by mid-2024.

Mum Florence Curr is on the hunt for a house, but it's tough. 

"House prices going up, interests going up, everything is very expensive," she says. 

That's the record 5.9 per cent inflation for you. To reign it in, and to absolutely no one's surprise, Reserve Bank Governor Adrian Orr on Wednesday announced the OCR would be moved to 1 percent. 

He's now expecting to raise it all the way to 3.4 per cent in 2024 to combat rampant inflation

But economist Brad Olsen says he's moving too slow.

"They should have gone more, they should have taken much stronger approach and stance," he says.

Orr is certain his hikes will bridle inflation after it peaks at 6.6 per cent. Olsen thinks the "Reserve Bank is losing control of inflation", but Orr is "confident it will return to the 2 percent midpoint over the coming years". 

The Reserve Bank's raise could be good news for the term deposit holders, but bad news for some borrowers.

Rising interest rates are already putting a chill in the overheated housing market.

"I think property investors is where we'll probably start to see a bit more pain," says Squirrel Mortgage Broker's John Bolton.

The Reserve Bank is now forecasting a 9 percent fall in house prices from the end of 2021 to mid-2024.

"Time will tell whether that will come to pass," says Yuong Ha, the Reserve Bank chief economist.

"We're more confident in the direction than the magnitude," Orr said. 

That potential downturn will bite after years of skyrocketing house price inflation despite the Government desperately pulling policy levers and promising housing affordability.

Since April 2019, when Prime Minister Jacinda Ardern ruled out a Capital Gains Tax, the median house price has increased by more than 50 percent to a whopping $880,000.

In the latest Newshub Reid Research poll we asked: "Should the Government revisit introducing a Capital Gains Tax on property?"

The majority, 54.7 percent, said yes, 32.6 percent said no, and 12.7 percent don't know.

"We're focusing on all of the other things we can do… I won't change my position on the CGT," Ardern said on Wednesday.

Even though a majority want it.