Good news for homeowners today when The Reserve Bank left the Official Cash Rate (OCR) unchanged at 2.5 percent. Homeowners and those entering the market could take confidence from the Reserve Bank Governor Alan Bollard’s statement that: “The outlook for the New Zealand economy has improved since the publication of the March Statement.” He went on to point out that whilst the Christchurch earthquake had been devastating for the Canterbury region economic recovery throughout the rest of the country appeared not to have been disrupted.
The strong outlook for export earnings and the associated growth in jobs and export lead recovery should serve as further encouragement for those looking to make a property decision. Bollard did warn of impending rises in the OCR. As the recovery gathered pace he expected interest rates to rise over the next two years. He was not specific about the timing or magnitude of these increases saying that “The pace and timing of increases will be guided by the speed of recovery, but for now the OCR remains on hold.” This may provide impetus for the housing recovery as buyer urgency heightens to take advantage of traditionally low rates.