RBNZ

PHOTO: The Reserve Bank of New Zealand (RBNZ). FILE

📉 The Reserve Bank of New Zealand (RBNZ) has slashed the Official Cash Rate (OCR) by 0.25%, and the move signals that the cuts aren’t over yet. With whispers of more reductions coming before year-end, Kiwis are asking: What does this mean for mortgages, housing prices, and the wider economy?

The Most Comprehensive NZ Real Estate Agent Database Ever Compiled | Order Now

🏦 Why the OCR Was Cut

Chief Property Economist Kelvin Davidson of Cotality NZ (formerly CoreLogic) confirmed that the 0.25% OCR cut was widely expected after strong signals at July’s meeting.

The Monetary Policy Committee considered three options:

  • ✅ 0.25% cut (chosen, 4–2 majority)

  • ❌ Hold rates steady

  • ❌ A deeper 0.5% cut

👉 The decision highlights a “downward bias”, meaning the RBNZ is gearing up for more cuts.

Want Better Leads? Smarter Prospecting Starts Here

📊 What the Forecasts Say

According to the latest Monetary Policy Statement (MPS):

  • 📉 GDP could fall again in Q2 (-0.3% possible)

  • 📈 Unemployment may rise further

  • 💸 Inflation might tick up (due to import costs), but spare economic capacity should prevent long-term overheating

The RBNZ’s own forecast puts the OCR trough near 2.5% by mid-2026 — a clear sign that this easing cycle has more to run.

🏡 Housing Market Impact

So, what does this mean for property?

  • 🔻 Mortgage rates could fall further, potentially lifting housing demand and prices slightly.

  • 😬 But with job insecurity and a weak economy, many borrowers may use the savings to pay off debt or shorten loan terms rather than fuel spending.

  • 🏚️ The housing market will likely stay subdued through 2025, with little relief for sellers hoping for a boom.

🎄 What’s Next?

The next big date is 26 November 2025 — the RBNZ’s final meeting of the year. Analysts suggest another OCR cut could land then, just in time to give households a pre-Christmas financial boost.

But with the first decision for 2026 not until late February, the real question is whether the Reserve Bank can balance relief for households with the risk of weakening confidence further.

🚨 Bottom Line

New Zealand’s economy is still shaky. While falling interest rates might bring some mortgage relief, the reality is that housing demand remains weak, job uncertainty looms, and the market isn’t bouncing back yet.

👉 Expect at least one more OCR cut, possibly two, before mid-2026. But don’t expect miracles for the housing market.

Don't be shy! Have your say....