The Reserve Bank of New Zealand (RBNZ) decided to keep the official cash rate (OCR) at 5.5%, which was expected since recent economic data hasn’t shown clear trends.
Inflation is slowly decreasing but is still considered too high. This slow decrease was a major point in the Reserve Bank’s brief report released with today’s decision. Everyone is now looking forward to the next inflation report on April 17, which will cover the first quarter of 2024.
As for the housing market, today’s decision doesn’t change much. We expect to see both home sales and property values continue to increase slowly, continuing the trend from early 2024. While more people feel confident about the housing market compared to six to nine months ago, high prices and mortgage rates are still major hurdles. Also, with more homes being listed for sale, buyers have more options, which could slow down price increases.
Interest rates are likely to remain high for most of 2024, which could make things difficult for new homebuyers and existing homeowners who need to renew their mortgages. We’ll probably have to wait until the next OCR decision on May 22 for any clues about when rates might be cut.
Darren Harris - Home4View 