Today’s highly anticipated rate cut is welcome news for mortgage holders and aspiring buyers, with the Reserve Bank of New Zealand cutting the Official Cash Rate (OCR) by 25 basis points, bringing it to 3.00 per cent.
Ray White chief economist Nerida Conisbee said the central bank was responding to mounting labour market pressures and accelerating population outflows.
“This decision comes as New Zealand’s unemployment rate has climbed to 5.2 per cent in the June quarter, the highest level since late 2020, while underemployment has also surged,” Ms Conisbee said.
“The deteriorating jobs market has triggered a mass exodus of citizens, with 71,800 New Zealanders departing in the year to June 2025 – the highest level in 13 years.
With inflation well-controlled at 2.7 per cent and sitting comfortably within the RBNZ’s 1–3 per cent target band, the central bank had clear justification to act.”
She noted that banks are expected to pass through the rate reduction within 2–3 weeks, providing additional relief for mortgage holders.
“With the national median house price stable at $781,000 and listings elevated at 36,870 properties, this easing should help support buyer activity during challenging economic conditions,” Ms Conisbee said.
“This cut addresses growing economic stress across New Zealand’s regions, with Auckland particularly hard hit by 6.1 per cent unemployment. The widening unemployment gap with Australia – now sitting at 4.3 per cent – has accelerated trans-Tasman migration as young New Zealanders seek better opportunities abroad.”
Ray White New Zealand chief executive Daniel Coulson said this cut marked another adjustment in a lengthy easing cycle.
“While previous reductions have helped ease borrowing costs and provided some support to both housing and business confidence, today’s move may be yet another signal of a slowing momentum in easing monetary policy,” he said.
“Future cuts appear likely to be fewer and further between, as the RBNZ balances inflationary pressures with the need to stimulate economic activity.
Lower borrowing costs have encouraged both buyers and sellers to re-engage with greater confidence, and today’s cut reinforces that. For those sitting on the fence with respect to real estate decision making, today’s announcement is a reminder that opportunities in the current market may be best taken sooner rather than later.”
Māngere has already seen strong buyer demand in 2025, and this rate cut is set to reinforce that. Lower borrowing costs will give first-home buyers and families more confidence to enter the market, while also supporting local sellers who have been waiting for the right time to list.
Get in touch with the Ray White Mangere team today to make your next move.
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