Will it be enough to move the market forward? In a widely expected move, the Reserve Bank of New Zealand (RBNZ) has cut its official cash rate (OCR) by a hefty 50 basis points (0.5%) to 4.75%. 

The 50-point cut was the third by the central bank since August and meant the OCR rate had fallen 125 basis points in that time.

In its 27 November statement, the RBNZ’s Monetary Policy Committee said annual consumer price inflation had declined and was now close to the midpoint of the Committee’s 1 to 3 percent target band. 

Inflation expectations were also close to target and core inflation was converging to the midpoint. If economic conditions continue to evolve as projected, the Committee expected to be able to lower the OCR further early next year. 

Immediately after the RBNZ announcement, ASB said it was dropping its variable personal and business lending rates by.05% and BNZ announced it was cutting its standard variable home loan rate, passing on the full OCR cut of 50-basis points. Kiwibank also announced it would be lowering its variable home loan rates by 0.50%

Ian Keightley, Head of Operations, Raine & Horne New Zealand said the key was whether the third rate cut this year would be enough to create a spark in the market.

“Our agents are seeing more confidence in the market as they work around the country. Realestate.co.nz has also reported buyer sentiment is changing with the properties on is website selling faster. Properties listed for less than 30 days increased from 23.9% in September to 27.9% in October meaning that stock was moving faster, and interest was warming up, CEO Sarah Wood said. 

Ian Keightley added: “Interest costs will certainly fall for borrowers with variable mortgage rates, while those with fixed rates may enjoy smaller reductions. Time will tell if these cuts encourage more homeowners to list their property so they can upgrade. They will certainly allow the large number of first home buyers to increase their budget.

“I would advise owners thinking of selling to contact their local Raine & Horne agent so they are ready to move quickly should the market respond positively.”

Realestate.co.nz said the abundance of stock in Aotearoa, with more than 32,000 properties available across the motu – the highest in a decade — was creating favourable conditions for those in a position to buy.  In addition, for 22 months, the national average asking price had remained steady, fluctuating only between $850,000 and $890,000, providing rare market predictability. 

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