RBNZ Holds OCR as Market Shifts: Has the Mortgage Rate Bottom Arrived?

Topic #1:  The Mortgage Mag 9th of July - Mortgage rates may have bottomed already as RBNZ holds OCR

Topic #2: NZ Adviser 8th of July -NZ housing market dips as buyers gain leverage

Topic #3: RNZ 9th of July - No climate change buy-outs in future, expert group tells government

Topic #4: Realestate.co.nz 9th of July -The New Zealand Property Report Good news for renters as national rental price falls for another month

Topic #5: RNZ 8th of July - Government to loosen rules for selling homes in trusts

Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice. Join us today for the week in review, where I talk about current events for the everyday investor and home buyer. Our topics for this week. Topic   📍 number one, from the Mortgage Mag on the 9th of July: mortgage rates may have bottomed already as RBNZ holds the OCR.

 Topic number two from the   📍 New Zealand Adviser on the 8th of July. New Zealand housing market dips as buyers gain leverage.  Topic number three, from   📍 RNZ on the 9th of July: no climate change Buyouts in future expert group tells government.  Topic number four from   📍 realestate.co nz on the 9th of July. The New Zealand property report good news for renters as national rental price falls for another month.

 And last topic for this week in review from   📍 RNZ on the 8th of July, government to loosen rules for selling homes in trusts.  As always, all of the links to these articles are in the show notes below. 

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So first topic for this week, in review from the Mortgage Mag on the 9th of July, mortgage rates may have bottomed already as RBNZ holds

the OCR. Mortgage rates in New Zealand may have already hit their lowest point, or at at least close to it following the Reserve Bank's decision to keep the official cash rate, the OCR, unchanged at 3.25%. According to Kiwibank Chief Economist Jared Kerr, there's only limited room for further cuts with varying opinions among economists about how much lower rates could go.

The Reserve Bank cited ongoing economic uncertainty and inflation risks as reasons for maintaining the OCR.. Still, its May projections support the case for further reductions, estimating a potential low of 2.9 by the December quarter remaining at that level until early 2027. This outlook also allows for a possible 50 basis points of cuts to come.

The central bank expects inflation measured by the consumer's price index, the CPI to rise near the upper end of its one to 3% target mid-year before stabilizing around 2% by early 2026. Xero Economist Louise Southall noted that the 225 basis point drop in the OCR since August last year should ease financial pressure on households.

However, a recent Xero survey showed that 82% of New Zealand businesses hadn't seen improved sales due to the rate cards, though a sense of cautious optimism is emerging. Financial markets remained mostly unaffected by the announcement as it was widely anticipated. The New Zealand dollar briefly rose to 60.16 US cents before retreating minutes from the Reserve Bank's Monetary Policy Committee reveal internal debate on the extent of future cuts.

Kerr believes the OCR is approaching its flaw with forecasts ranging from 2.5% to 3%. He emphasized that current disagreements among economists are minimal compared to last year when predictions varied by up to 400 basis points. Kiwibank sees a 75 basis point cutters necessary to stimulate the economy and bring rates below the neutral level.

However, others in the committee argue that lingering inflation pressures call for more restraint. If the OCR bottoms at 3% or higher, mortgage rates are likely already at their lowest, but if the rate drops to 2.5%, there may still be room for mortgage rates to fall further. Your guess is as good as anybody else's at this point.

So my advice would be talk to your mortgage adviser and make the decision that's best for your situation, but get help with making that decision. 

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Topic number two from the New Zealand Adviser on the 8th of July, New Zealand housing market dips as buyers gain leverage. New Zealand's housing market continued its gradual adjustment in the June quarter with the QV house price index showing a 0.3% national decline in average home values, now at $910,479.

This is 0.6% lower than the same period last year, and 14.5% below the peak in late 2021. While major cities like Auckland, Wellington, and Dunedin posted further declines, several regional areas showed gains more affordable markets such as Wairoa, Gore, Buller, Far North, and Waitomo led the increases highlighting a growing divide between urban and rural trends.

QVs National spokesperson noted that despite economic pressures improving affordability is attracting first time buyers and .Owner occupiers to lower and mid-level areas. Increased property listings and softer rates are contributing to buyer activity. Though global uncertainty and rising living costs continue to dampen the momentum. Economic forecasts remain cautious.

While some banks anticipate modest OCR cuts later in the year, others suggest that the likelihood is fading. Analysts point to a sluggish economy and weak key sectors limiting any rapid market recovery. Auckland's average home value declined all sub regions except Central Auckland saw value drops. Open home attendance remains low, and buyers are making lower offers emit a growing supply, including new townhouse developments.

Hamilton's average value rose 0.5% to $791,707 with annual growth at 1.2%. The broader Waikato region also saw modest gains, particularly in Waitomo in the Waikato district, and Waipa. Local experts, site renewed buyer and seller confidence following the stabilization of interest rates. Values edged up 0.1% while the wider Bay of Plenty slipped slightly, Kawerau outperformed with a 3% rise, whereas Apotiki dropped 6.6%.

Sellers in these areas are gradually adjusting their price expectations. Hawke's Bay values stable though Wairoa saw a sharp quarterly jump of 12.6%. Wellington recorded a 2.3% drop with all metro areas declining. Despite recent OCR reductions, demand remains subdued amid employment concerns and ample property supply.

Christchurch, however, held steady with a 0.1% increase supported by consistent via interest. Saw declines of 1.2% and 2.3% respectively while Malborough rose 0.6%, though overpriced listings still face downward pressure. Queenstown Lakes rose 1.9% to an average value of $1.85 million. Now 16.4% above the National Peak. Strong winter tourism and increased stock are supporting steady interest.

Invercargill also rose 1.6% with strong demand from first home buyers and investors while Gore so surged eight. 0.8%. So a bit of a mixed bag in the property market, unsurprising considering it's winter that there's a bit less activity at the moment in areas outside of those that attract buyer interest during the winter months, like Queenstown.

So yeah, I think this is a normal stage of the cycle at this stage of the seasonal cycle as well.

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 Topic number three for from RNZ on the 9th of July. No climate change Buyouts in future expert group tells government homeowners affected by severe weather events should no longer expect government funded property buyouts according to a new report by an independent expert panel advising on climate adaptation.

Instead, individuals should be responsible for understanding their risk and deciding whether to relocate from high risk areas. The panel commissioned by the Ministry for the Environment proposed a 20-year transition period to give homeowners time to adjust and spread out costs. Its members included economists, iwi, and representatives from the banking, insurance, and local government sectors.

  As New Zealand faces growing climate risks highlighted by the $14.5 billion in damage from Cyclone Gabriel and the 2023 Auckland floods, the government continues to struggle with drafting legislation to guide climate adaptation. The previous government failed to pass an adaptation law and the current one has yet to introduce the proposed Climate Adaptation Bill.

The report builds on previous findings and underscores an urgent need for change. Warning that the country is currently under prepared .Without action, financial burdens will grow. Some insurers may withdraw from high risk areas, and property values could decline. The panel stress that homeowners should be at the costs of remaining in vulnerable areas unless lives are at risk.

However, this personal responsibility hinges on access to clear nationally consistent risk data, which is currently lacking .Among its key recommendations: mandatory local adaptation planning should be introduced. Councils should be protected from lawsuits to make difficult decisions, such as withdrawing services from certain areas.

Hardship support should continue following major disasters, but financial compensation for property damage should phase out over time. Ending buyouts after the 20 year window. Adaptation funding should follow a beneficiary pays model. With those gaining the most from infrastructure investments, contributing the most.

Central government should invest only in protecting crown assets or when there are clear national benefits. Special support should be provided to Maori communities whose marai and urupa are often located in higher risk areas. The report also emphasized the vulnerability of rural and low income communities warning that as property values fall in high risk zones, socioeconomically disadvantaged groups may become increasingly concentrated in them.

These recommendations diverge from a previous expert report that advocated for ongoing financial compensation to help relocate at risk communities. Raewyn Peart of the Environmental Defense Society, who previously worked on climate adaptation law proposals, said the priority should be preventing new developments and hazard prone areas such as floodplains.

She supported the idea of a national environmental standard to stop councils from permitting such builds, but cautioned that the new report might not do enough for people who are vulnerable through no fault of their own. Still, she acknowledged there must be a limit to public support when individuals choose to stay in high risk zones.  📍  📍 

If you'd like to learn more about investing in property and how to reduce the risk, join me at one of our free events called How to Succeed With Property Investing. I'll discuss strategies for successful investing from my perspective as an experienced investor and a financial adviser, and all of our free events are available live and online.

Check out www.propertyapprentice.co.nz for upcoming dates and register today. It is all about increasing your knowledge to reduce your risk.   📍  📍 And if you've already been to one of our free events and you'd like to find out more about how we can help you to reach your financial goals, you can also book a no obligation phone call or meeting with my husband Paul Roberts via the website.

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 Fourth topic for this week in review from www.realestate.co.nz on the 9th of July. The New Zealand property report good news for renters as national rental price falls for another month. The latest data from www.realestate.co.nz shows average rental prices across New Zealand fell in June with the National Weekly average dropping to $636.

That's a 2.7% decrease from $653 in June, 2024. Wellington Renters saw the greatest relief with average weekly rents falling by 10.9%, from $701 down to $625 a week. Hawke's Bay also posted a notable drop of 6.6% with prices decreasing from $677 a week to $632 a week, year-on-year. Www.realestate.co.nz spokesperson Vanessa Williams noted the significance of these price shifts in the current economic climate, emphasizing that even small reductions can make a meaningful difference for household budgets.

In contrast to the national trend, parts of the South Island, experienced sharp rent increases. The West Coast saw rental prices climb by 9.1%, rising from $396 to $433. Otago followed with an 8% increase. With average rents moving from $571 to $616. Southland reached a record high weekly rent of $489. A 6.1% rise from $461.

The region continues to stand out by setting price records in both rental and sales markets for the second consecutive month. Williams described Southland's market as intriguing, highlighting its deviation from broader national patterns. Renters now enjoy increased flexibility thanks to a 15.3% year-on-year rise in new rental listings.

In June 6,120 new properties were listed across the country. Gisborne led the way with a 96% increase in listings followed by Hawkes Bay and Wellington, where listings jumped from 276 in June, 2024 to 503 in June, 2025.

Waikato also experienced significant growth with listings rising from 479 to 647. William said that the growing number of available properties is helping keep rental prices in check. She also pointed out that with the Healthy Homes compliance deadline now passed. Renters can expect that newly listed properties meet national standards, ensuring a healthier living environment.

    

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Topic number five from RNZ on the 8th of July, government to loosen rules for selling homes and trusts. The New Zealand government plans to relax anti-money laundering requirements or a ML requirements for low risk property transactions involving family trusts. The change aims to reduce the paperwork and compliance burden for ordinary homeowners.

Associate Justice Minister Nicole McKee said the current rules unfairly subject families to excessive verification processes despite posing little risk, the proposed adjustment would allow real estate agents to apply simplified customer due diligence when a sale is clearly low risk. Under this new approach, agents would only need to confirm that trustee names match the property title, verify the trustee's identities and roles, and keep a copy of the trust deed.

This is a shift from the current more rigorous process that requires full disclosure of all trust beneficiaries, including children and legal professionals, as well as documentation of how the property was funded. Although the government hasn't yet defined what qualifies as low risk professionals such as agents, lawyers and accountants will receive clear guidelines to help them apply the changes confidently without concern over regulatory penalties.

The reform reflects a broader update to New Zealand's AML regime also announced were changes to simplify the process for parents opening bank accounts for their children. According to McKee, the changes aimed to modernize the system by tailoring compliance requirements to the actual level of risk, ensuring that rule abiding citizens aren't bogged down by unnecessary bureaucracy.

With rental prices fluctuating regional trends emerging and new government changes affecting property sales, now's the perfect time to stay informed.   📍  📍 Join me at one of our free events called How to Succeed With Property Investing. These are all available online so you can gain valuable insights and strategies tailored to today's market conditions regardless of where you live.

Whether you're an experienced investor or just getting started, this free session will equip you with the key tools and insights to make confident, informed decisions. Don't miss out. Register today and take the next step towards achieving your financial success. In our free events, I'll also tell you more about how we can help you as a client to achieve your investing goals.

So if you're interested in finding out more about what we do, go to www.propertyapprentice.co.nz and register for one of our free events today.   📍  📍 If you've already been to one of our free events and you'd like to find out more about how we can help you on your journey book a no obligation phone call or meeting with my husband Paul Roberts through our website.

That's www.propertyapprentice.co.nz.  Thanks for listening.

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