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The Green Party is also claiming a possible loss of up to 30,000 jobs, as the official cash rate (OCR) hike dampens economic output and further underpins the already strong New Zealand dollar.
After more than three and a-half years of the OCR at a record-low 2.5%, Reserve Bank governor Graeme Wheeler is expected to begin increasing the cash rate today by at least 25 basis points, and many economists pick additional hikes totalling 2% by the end of 2015.
While economists are almost unanimous the Reserve Bank should raise the OCR, to quell household spending and rising inflation, Mr Rosenberg warned that for many households the immediate change to floating mortgage rates ''will go straight into higher housing costs''.
''There is pressure from financial markets to raise the rate by at least 1 percentage point, from 2.5% to 3.5%, by the end of the year and a further percentage point, to 4.5%, by the end of 2015,'' Mr Rosenberg said in a statement.
He estimated each 1% rise would cost a family $20 per week, for each $100,000 of their mortgage.
He predicted a family with a $300,000 mortgage could face $60 a week in extra costs by the end of 2014 with the OCR at 3.5%, and $120 per week by the end of 2015 at 4.5%.
He also highlighted that businesses wanting to borrow to fund expansion would have to consider whether they could meet higher borrowing costs.
''That could reduce job growth and improvements in productivity,'' Mr Rosenberg said.
Green Party Co-leader Dr Russel Norman said the National Government had failed to contain rising house and power prices, which was prompting the OCR hike, which could cost up to 30,000 jobs.
He said Reserve Bank papers obtained by the Green Party via the Official Information Act showed a 1% rise in the OCR reduced economic output by 0.5%-1% and increased unemployment by 0.5%-1.2%, compared with the OCR not being raised.
''That equates to 12,500-30,000 fewer jobs in the economy than if the OCR wasn't increased,'' Dr Norman said.
Mr Rosenberg said if the Reserve Bank saw house price inflation as the ''main danger'', it should address that directly, as its loan-to-value (LVR) restrictions on bank lending were aimed mainly at financial sector stability, not house price stability.
The Reserve Bank could use other policies, such as raising bank capital requirements for housing loans, tightening banks' core funding ratios, or more directly restricting the use of overseas funds.
''Any of these must be accompanied by much stronger government action to ensure they don't end up hurting those who need good housing the most,'' Mr Rosenberg said.
Although the economy as a whole was recording strong gross domestic product (GDP) growth, if the boost from rebuilding in Canterbury was removed, ''the growth looks very modest'', he said.
Unemployment was still at 6%, with 147,000 people unemployed, 257,100 jobless, and 122,600 part-time workers wanting to work more hours, he said.
If New Zealand's interest rates rose faster than in other countries, there was a risk to the exchange rate becoming stronger and New Zealand's international indebtedness increasing, Mr Rosenberg said.
''Rising interest rates, with the difference between New Zealand and the rest of the world growing, will attract an influx of money, raising the exchange rate and hurting exporters,'' he said.
An OCR hike would encourage New Zealand banks to use overseas borrowing to fund mortgages, raising overseas indebtedness, which would make the Reserve Bank's actions less effective, Mr Rosenberg said.