“ Then, regarding New Zealand’ s economic growth itself, the general tone of the commentary is that it’ s likely to be slower than in a world without tariffs.
“ As such, the MPC noted they have scope to lower the OCR further as appropriate and as the effects of tariffs become clearer. In other words, New Zealand’ s interest rate environment still has a‘ downward bias’ and it’ ll be interesting to see what happens to mortgage rates in the coming weeks.”
The Monetary Policy Committee will make its next OCR decision on 28 May, and will no doubt consider recently released data on inflation and employment.
In the meantime, borrowers, buyers and investors are facing a period of uncertainty, according to Mr Davidson.
“ February’ s RBNZ lending data shows that borrowers continue to hedge their bets, with floating debt still popular( 41 per cent of loans) but fixed terms of longer than 12 months also coming back into focus.
“ At 20 per cent of activity in February, fixes of greater than 12 months were the most popular they have been since July last year,” he said.
“ For now, tariff-uncertainty aside, our expectation is a subdued upturn for the property market in 2025, with sales volumes and house prices rising slowly.
“ For individual borrowers, it will mean finding a balance between securing the best and lowest mortgage rate, but also weighing up the certainty that a longer-term fixed loan can offer.”
At Loan Market, we support the view that some degree of uncertainty is always present, and quite normal.
Global crises are a near-constant backdrop – there’ s rarely a year without one. That’ s why anyone making a major economic decision should do so with the expectation of future challenges and prepare with resilience in mind.
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