NZ Dollar Direct Influence On OCR Moves

dollar2There as been no change in the OCR however another cut is expected in 2015 and there maybe a further cut in 2016.  Future movement in the OCR is said to be linked to the value of the NZ Dollar and right now the NZD is too high to maintain inflation at the target rate of 2%.  A lower OCR will provide some upside for home owners with lower interest rates.

The average bank interest rate for a two year loan was just 4.97% in September 2015 versus 6.13% a year earlier (Sept 14).  Property values particularly in the regions are low but predicted to rise.  Attractive rates on home loans will continue to attract Auckland property investors  to the regions says Kris Pedersen of Kris Pedersen Mortgages.

On BNZ Senior Economist Craig Ebert said the Reserve Bank had done the right thing by holding the OCR and retaining an only-moderate easing bias.

Our take is that the RBNZ is doing its best to buy some more time, before potentially having to cut further. It’s still, at heart, a reluctant cutter, in our view, but is keeping its options open nonetheless”.
Ebert said.

This blog article was written for PropertyBlogs by Mobilize Mail.

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