The Reserve Bank of New Zealand (RBNZ) has announced that it will hold the Official Cash Rate (OCR) at 3.25%, pausing its 11 month rate cutting streak.
After six consecutive cuts since last year, this decision doesn’t come as a surprise. The RBNZ is taking a cautious approach, waiting to see clearer signs around inflation and how the economy is tracking (both locally and globally) before making any further moves.
So, what does this mean for you?
- Fixed Rates are likely to remain steady for now – While RBNZ has held the OCR at 3.25%, they’ve indicated further cuts are still possible. Economists are forecasting up to two more OCR cuts in the second half of 2025 – possibly starting in August.
However, the impact on fixed rates may be limited, with signs suggesting we’re nearing the bottom of the current rate cycle. - If you’re floating or fixed term is ending soon – Now is a good time to chat and review your options. There could be opportunities to refix at a lower rate depending on your situation.
- The property market remains in a holding pattern.
National values rose just 0.2% in June — a modest gain that has offset previous declines. Even with lower interest rates offering some relief, economic uncertainty and employment concerns are keeping many buyers on the sidelines.
That said, some are making the most of the conditions. First-home buyers remain active, making up over 25% of property purchases, and smaller investors are returning, encouraged by falling rates and improving cashflow.
Want a full breakdown of what’s happening in your region and what the latest trends mean for you?Read June Cotality Property Insight HERE
The Bottom Line
While inflation is forecast to tick up slightly mid-year, RBNZ still expects it to ease back to the 2% mark by early 2026. RBNZ wants more data before making its next move, but they’re still signalling that lower rates are on the horizon!
If you’ve been waiting to see what would happen before making a decision on your mortgage, this could be a good window to review your options.
Reach out, we’re here to help you make sense of the market and find the right solution for your situation.
