The Reserve Bank of New Zealand (RBNZ) has cut the Official Cash Rate (OCR) by 25 basis points to 3.5% as the next property upturn starts to build. 

The cut to the lowest OCR point since October 2022 was widely predicted by economists following a commitment by the central bank earlier this year to continue lowering the rate through 2025.

The bank has cut rates by a cumulative 200 basis points since August last year to support the sluggish Aotearoa economy, which emerged from recession and grew 0.7% in the last quarter of 2024.

The RBNZ’s Monetary Policy Committee said in a statement on 9 April 2025 that annual inflation remained near the bank’s 1%-3% target, and that firms' inflation expectations were “consistent with inflation remaining at target over the medium term".

"While monetary restraint has been removed at pace, household spending and residential investment have remained weak.

“The recently announced increases in global trade barriers weaken the outlook for global economic activity. On balance, these developments create downside risks to the outlook for economic activity and inflation in New Zealand,” the committee said

"Having consumer price inflation close to the middle of its target band puts the committee in the best position to respond to developments. As the extent and effect of tariff policies become clearer, the committee has scope to lower the OCR further as appropriate," it added.

Banks across the motu moved quickly to lower interest rates following the OCR cut. Westpac, Kiwibank, ANZ and BNZ all said they would cut rates to home loan products, lowering borrowing costs for many Kiwis.

Meanwhile, data from the latest CoreLogic Home value Index shows New Zealand’s property market has moved into its next phase of growth, on the back of lower interest and improved affordability. 

The Index showed Aotearoa property values increased by 0.5% in March, after a 0.4% lift in February, and a flat January. The March rise was the strongest since January last year. CoreLogic said property values were now sitting at $812,195, the highest since June 2024 ($818,649), however, they were still down by more than 16% compared to the previous January 2022 peak.

Raine & Horne New Zealand Supervision and Compliance Manager, James Shepherd said it was pleasing to see the property upturn start to build, noting it would always take time for the impact of earlier OCR cuts to flow through to the market.

While growing demand varied in different main centre and regional markets and could be described as patchy, this was to be expected as the economy was still in recovery mode after a challenging period.

“The good news is that there is now a broad consensus among market commentators that national residential property values will rise by a modest but welcome 5% this year, give or take, with cheaper finance pushing housing prices upwards, despite a high level of listings and buyer choice,” James Shepherd said.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.