The OCR and You
By Scott Mears - Aspire PRO Enterprises
On 28 May 2025, the Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR) by 25 basis points to 3.25%, marking its sixth consecutive cut since August 2024 - a total reduction of 225 basis points.
The move reflects easing inflation, which remains within the 1–3% band at 2.5% and spare capacity in the economy, despite headwinds from global trade tensions and tariffs.
According to economists, the easing cycle could push the OCR to 2.75% by late 2025, with room for further cuts if global strains persist.
Some banks were already trimming mortgage rates in advance of the OCR decision, and although another renewed bout of competition is always possible, the largest mortgage rate falls may well be behind us.
So, how are property prices responding?
According to CoreLogic’s Cotality Home Value Index, property values in New Zealand edged down by -0.1% in May and remain -1.6% below a year ago and -16.3% below the January 2022 peak.
Values were patchy around the main centres in May, with Hamilton up by +0.1%, but Dunedin and Tauranga both edged down by -0.1%. Auckland dipped by -0.3%, Wellington by -0.4%, and after a period of resilience, Christchurch fell by -0.8%
What’s the Property Outlook?
The RBNZ’s prediction for the Cotality Home Value Index is an increase of +3.5% this calendar year before a rise of +4.8% in 2026.
Final Take
The OCR cut to 3.25% reinforces a trend toward cheaper borrowing, likely supporting modest house price growth in 2025.
For anyone buying or investing in short term rentals (STRs), or thinking about taking the plunge, now may be a smart time to do so, so you can optimise cash flow and be in a position to take advantage of expected property price increases.
Why not explore the short-term rental market with your property managed by Aspire PRO Enterprises - go here to get a free appraisal on your property or contact us for a confidential discussion.