What does it mean for those who already own their home or a rental property, and for those who are thinking of buying either their first home or a rental?
Most current home owners won't be affected much. If you move, you'll get less for your old home but pay less for your new one.
However, you should be more wary than in the recent past of committing to buy a new home before selling the old one.
Houses are taking longer to sell - an average of 31 days in August, up from 25 in August 2003, says BNZ chief economist Tony Alexander. And that trend is likely to continue.
Back in early 2000 the average was more than 60 days, and it could happen again. If you have bought a home and your old place is languishing on the market for two or three months, that's when you're likely to accept a much lower price than you originally envisaged.
For those who own a rental property, the message is clear: Try not to get into a situation in which you are forced to sell in the next few years.
With mortgage interest rates rising, some landlords might find it hard to make mortgage payments. Even if you have a fixed-rate loan, you might face problems if you're tenant-less for a while or your other income is reduced.
Talk to your mortgage lender, preferably before you are late with any payments. Lenders don't like foreclosures, and will usually try to help you with an alternative plan.
You may be able to skip or reduce payments for a while. This is no free lunch. The extra payments will be added on at the end of the loan, and over all you will pay more interest.
But you get short-term relief. And, when better times come, you may be able to recover the lost ground.
Another possibility is to extend the term of the loan from, say, 25 to 30 years. Again, you will pay more total interest. But your monthly payments will be reduced.
Let's say you have a $200,000, 25-year mortgage at 8.5 per cent. Your monthly payments will be $1,610.
If the interest rises to 9 per cent, the monthly payments will rise to $1,678. If, however, you change the term to 30 years, the payments will drop back to $1,609.
What about would-be buyers of houses? Should you wait around for lower prices?
Alexander predicts prices will fall about 5 to 10 per cent, "then sit steady for a couple of years".
Paying 5 or 10 per cent less for a $247,000 house - the national median price - gives you savings of around $12,000 to $25,000. That's not to be sneezed at.
There's no guarantee, of course, of that price drop. And unless the particular house you buy has changed hands in recent years, you can never be sure that its value has fallen as much as the national average.
Still, most experts are now predicting at least some price fall. And it may be even bigger than 10 per cent.
If I were you, I would sit on the sidelines for a year or two, or at least bargain hard if you must buy now. Many sellers are already anxious, and may be prepared to sell for considerably less than their asking price.