The number of mortgagee sales fell for the first time since February 2009, reports Emma Page in the Sunday Star Times - though experts warn it's too soon to celebrate.

Mortgagee sales, which serve as a strong indicator of how the economy is faring, hit 241 in August, a 25% fall from the 321 sales the previous month. This is the first considerable decrease in six months.

The figures, released by property and land information company Terralink, suggest mortgagee sales may be coming down from the peak reached in July.

However, Terralink managing director Mike Donald is reported to have said that the drop was at best an "easing of stress" and did not represent a recovery, pointing out that mortgagee totals were still much higher than August 2008 when there were 100 such sales.

And with interest rates for floating mortgages predicted to reach 9% by next year, experts are warning homeowners to be prepared for increased repayments. The expected interest rate rise also means first-time buyers will find it harder to get on the property ladder.

ASB economist Nick Tuffley expects the Reserve Bank to raise the official cash rate from its low level of 2.5% early next year in response to a recovering economy and stubborn inflation rates.

Home loan rates have already moved in response to the expected rise, with fixed rates climbing. But Tuffley said these were likely to rise again in the coming months.

He said anyone thinking about buying now should factor in higher future rates, rather than rely on the current floating and short-term fixed rates of around 6%.

Financial commentator Bernard Hickey also warned homeowners to be prepared for interest rate hikes, saying they should budget to meet rates as high as 9%. He said the rates would also affect affordability for first-time buyers. The latest BNZ Home Loan Affordability measure showed affordability had worsened and was at the same level as December 2008.

It now takes 59.7% of the median income to service an 80% mortgage on a median-priced house. Housing is considered affordable when it accounts for no more than 40% of take-home pay.