All eyes are on the central bank as it meets today to discuss monetary policy
New Zealand's current, low interest rates are creating opportunities for first-time homeowners to enter the market. The country's official cash rate (OCR) has been locked in at 4.25% since November – the lowest it has been in two years.
Meanwhile, the market is abuzz with excitement as the Reserve Bank of New Zealand (RBNZ) meets today to discuss monetary policy. Kiwis are optimistic that the central bank will slash interest rates even further, potentially creating even more entry points to move into the country's housing market.
"If the interest rates are cut, it will flow through [the economy], increasing confidence and people's borrowing capacities," David Windler (pictured), Auckland-based financial adviser at The Mortgage Supply Co., told New Zealand Adviser.
Windler predicted that there will be a "little bit of an uplift" if rates are cut, but he doesn't anticipate a hot market.
"I think it will be nice and steady," Windler said. "It will be a market that operators can rely on.
"I'm fairly positive around the market and the year ahead," he added.
That's good news for New Zealand's otherwise sluggish economy, which has been plagued with conflicting market forces in recent weeks. In fact, while rates have fallen to new lows, so have property values. In addition, rising unemployment rates (which ticked back up to 5.1% earlier this month) makes it difficult for some Kiwis to even consider entering the market.
"And some investors would have been wary about purchasing with higher rates," Windler said.
Momentum is growing
Yet, despite all the market noise, after the RBNZ cut the OCR in November, inquiries from would-be buyers began to surge. Some market participants said the property markets have been busier than ever before at the start of 2025.
Windler said his firm started off the year with more inquiries, as opposed to January 2024.
John Moody, chief financial officer at Basecorp NZ, agreed that there have been more transactions across both the investor and first-time homebuyer market.
"The first-time buyers have held up in the market over the last 12 months, particularly the lower end of the market," he said.
And new buyers don't seem to be confined to one area either.
April Hastilow, a Christchurch-based mortgage adviser at Opes Mortgages, said she's seen an uptick in first-time homebuyers throughout the country, but particularly in the last six months.
"A lot of people are moving to Christchurch – but also, Auckland, Nelson, Tauranga," she said. "The lifestyle and affordability are part of that; there's good affordability around options that are available. There's also a lot of first-time buyers in Wellington at the moment. It's probably less so with the government employees, but still a lot of people looking to buy."
