The Reserve Bank cut the Official Cash Rate (OCR) on 20 August from 3.25% to 3%. This marks a 2.5 percentage point drop since the easing cycle began exactly a year ago.
In May, the bank anticipated the OCR would bottom out at 2.9% in 2026. It has now revised that outlook, expecting the low point to be 2.5%. Notably, two members of the Monetary Policy Committee pushed for a larger cut of 0.5 percentage points, though the majority settled on a 0.25-point reduction.
Finance Minister Nicola Willis welcomed the cut, commenting that “Lower interest rates support businesses to expand and grow, support increased construction activity, create jobs and put more money in people’s pockets.”
Market Confidence Building
Daniel Horrobin, Director of City Realty Ltd, says the move was expected but is still encouraging:
“Although no surprise, it’s another positive step in the right direction and will hopefully inject further confidence into what has been a relatively subdued marketplace. Many of the major banks had already moved ahead of the Reserve Bank, proactively reducing lending rates — a decision applauded by many. For those sitting on the fence, this latest cut should provide added confidence for both buyers and sellers.”
Auction and Open Home Activity
While the auction room has been quieter through August, momentum is building:
15 Auctions are scheduled for the final auction day of the month, creating a strong launchpad into spring.
A notable highlight was the sale of a one-bedroom apartment at 2 Beach Road, reported by NZ Herald’s OneRoof. Opening at just $15,000, the property ultimately sold for $34,700 after 51 bids.
Open home attendance has also shown resilience. Mid August data revealed that although the number of open homes held was down week-on-week, buyer numbers per open home were up by 6%.
Industry Outlook
The Real Estate Institute of New Zealand (REINZ) also reports steady buyer interest.
Chief Executive Lizzy Ryley noted “We’re seeing the usual seasonal patterns play out, with buyers still active in the market even as listing volumes tighten ahead of spring. The lift in sales compared to last July suggests there’s a solid level of interest despite fewer new listings.”
Looking Ahead
Daniel Horrobin remains positive as the market heads into warmer months:
“We remain optimistic that as spring approaches, those who have been hesitating will feel the time is right to act. We look forward to helping both sellers and buyers take the next step in their real estate journey.”
Pause For Breath The Reserve Bank of New Zealand held the Official Cash Rate (OCR) at 3.25% on 9 July, as widely expected. According to Interest.co.nz, the Monetary Policy Committee opted to pause while it assessed persistent inflation pressures and the pace of the country’s economic recovery. While a rate … Read more
Cause for Optimism Despite ongoing uncertainty globally, positive momentum is returning to New Zealand’s property sector — and the signs are encouraging. “Despite the chaos playing out internationally, we’re seeing strong indicators of renewed confidence at home,” says Daniel Horrobin, Director of City Realty Group. “There’s a noticeable shift — … Read more