Low interest rates


PHOTO: CHRIS GORMAN/STUFF Low mortgage rates and the decision not to apply a capital gains tax make housing a more appealing investment.

Economists expect a low official cash rate (OCR) to give the economy a boost over the coming year.

NZIER has released its latest quarterly predictions, in which economists said they expected another cash rate cut in September.

The OCR is currently at 1.5 per cent – an historic low.

Principal economist Christina Leung expected the next rate cut to increase economic activity. NZIER expects annual gross domestic product (GDP) growth to average around 2.6 per cent over the next five years.

It was 3.4 per cent over the previous five.