Another OCR cut signals a brighter 2025

The recent frenzy of interest rate cuts has been welcome news, emboldening financial fortune tellers to declare a less gloomy economic future is in our sight. 

It’s even better news today as the Reserve Bank announces another cut to the Official Cash Rate (OCR) of 50 basis points, bringing it down from 4.75% to 4.25%. This follows its most recent cut in October, and its first cut since 2020 in August this year.

The OCR impacts the mortgage rate that banks can charge, and while banks have been lowering their rates in previous months, today’s OCR drop announcement will be seen by many as reflecting extra confidence in the economy.

Lodge Real Estate Managing Director Jeremy O’Rourke says this will have a positive flow-on effect to the property market, an encouraging sign that the market has well and truly bounced off the bottom.

“We’ve been saying for a few months now that buyer intent and activity is strong in the Hamilton market, there are some good decisions being made and buyers are starting to act with confidence again.

“This latest OCR cut will be very welcome news across all levels of buyers, from investors and first-home buyers through to the $1 million-plus market. Lower interest rates make cash easier to access, in turn making it easier for buyers to invest in more property or upgrade to a bigger home. 

“While changes like these take time to filter through to house prices, I suspect buyers will be very happy with today’s drop.”

The latest OCR cut is the “icing on the cake” following a raft of Government measures initiated this year to help stimulate the housing market, says Lodge City Rentals General Manager Jason Waugh.

“This year has been a busy one with Government changes and lowering interest rates. We’ve had the loosening of the CCCFA (Credit Contract and Consumer Finance Act), the re-introduction of interest deductibility for landlords, and the easing of DTI and LVR restrictions,” he says.

“Overall, it’s creating a positive environment for investing, and with Hamilton surging in population and again being named New Zealand’s fastest-growing city, I expect today’s announcement to be even further evidence that investing here is a good decision.”

Jason says Hamilton could be well-positioned to benefit most from the range of factors that have combined to create a positive investment environment.

“Hamilton is proving to be a bit of an outlier around the country in terms of its rental economy.

“Our rental index is at odds with the rest of the country; we’re not seeing the big drops in rent and increased availability of rental properties that other areas are, and with our population set to grow considerably in the next 20 years, Hamilton remains a very attractive proposition for investors.”