What does the OCR cut to 2.5% mean for mortgage borrowers in NZ?

The OCR cut to 2.5% by the Reserve Bank of New Zealand makes borrowing cheaper. Mortgage rates are falling, and borrowers can now access some of the lowest short-term mortgage rates since 2021.

Is now a good time to invest in NZ property?

Yes, property experts and banks agree the market has bottomed out. With low interest rates, rising sales, and improving confidence, this is an opportune time to invest before competition heats up.

How are banks reacting to the interest rate cut?

All major banks - ANZ, ASB, Kiwibank, and Westpac - are aligning on the recovery narrative. They report increased credit availability, stronger buyer sentiment, and rising investor activity.

How can Staircase help with property investment?

Staircase offers mortgage and investment reviews, helps identify growth suburbs, and builds portfolios designed for long-term wealth—balancing cash flow with capital growth.

Which NZ regions are showing strong recovery signs?

Auckland, Tauranga, and Queenstown are leading the recovery, with early signs of renewed competition and price momentum.

NZ Property Market Turns the Corner: OCR Cut to 2.50% Boosts Confidence

Staircase Financial
Oct 8
3 min read

Staircase Mortgage Newsletter – October 2025

With the OCR cut further, the property market recovery is accelerated

The Reserve Bank has just cut the OCR by 0.5 percentage points to 2.50% per annum its boldest easing move in three years. This decision doesn’t start a recovery, it accelerates one that is already underway.

Property sales have been rising since winter, mortgage rates have fallen sharply, and investors are back in the market.

The OCR cut confirms what the data already show: the slump is over and the next upturn is well under way.

ANZ: Stability Before Momentum

ANZ’s latest Property Focus (September 2025) shows the market has already steadied. The REINZ House Price Index was flat in August and up just 0.2% year on year a clear sign that prices have bottomed.

Inventories remain high, keeping buyers in control for now, but the lower OCR will tilt conditions back toward sellers over the coming year. ANZ notes that August’s -0.9% GDP result was likely the low point for the economy, with growth returning in Q3.

Their outlook aligns closely with our (Staircase) view that the recovery is transitioning from stability to momentum.

ASB: “Start Me Up” Confidence Through Decisive Action

ASB supported a “rev up the engine” approach to monetary policy this week, arguing that only a strong 0.5% cut would deliver the confidence boost the economy needed.

Inflation is back within the 1–3% target band and spare capacity is wide.

The OCR at 2.5% now puts New Zealand policy where ASB’s “Taylor Rule” models suggest it belongs, and will likely slip, toward 2.25% by early 2026.

Wholesale rates are already responding, and borrowers refixing over the next few months are locking in some of the lowest short term mortgage rates since 2021.

Kiwibank: “Go Big for Bang-for-Buck”

Kiwibank was among the first to call for a bold half-percent cut, not incremental steps. They argued that smaller moves would fail to lift sentiment or kick-start spending.

Their view proved right: today’s decisive cut has given borrowers a clear signal that monetary policy is now in stimulus mode and that New Zealand is open for business again.

Westpac: Credit Conditions Loosening Fast

Westpac reports that credit availability has improved markedly. Two year rates are down about 2.4 percentage points in 12 months. One year rates are around 4.5% which mean monthly repayments on the average mortgage are about $550 lower than a year ago.

Banks are reducing test rates, expanding borrowing capacity by tens of thousands per buyer.

Investor lending is back to pre-pandemic levels, and sales volumes (a leading indicator for price growth) are climbing.

The Recovery Has Legs

Across all four major banks, the message is consistent: the bottom is behind us. Investors and First home buyers are returning as affordability improves.

Listings are tightening as vendors wait for better prices. Investor confidence is strengthening with interest deductibility restored and tax headwinds easing.

While growth will be moderate through 2025, the foundations for a multi-year upswing are locked in: low rates, limited supply, and strong migration.

Why Acting Now Matters

History shows that the best returns come to those who move early in a cycle. The window between “stabilisation” and “competition” is brief.

The smart money is already moving, particularly in Auckland, Tauranga and Queenstown.

This is the moment to lock in finance while rates are near their lows, re-assess borrowing power and target growth corridors where demand outpaces supply.

How Staircase Can Help You Capitalise

For over two decades, Staircase has helped New Zealanders use the property cycle to build long term wealth strategically.

We can help you review and restructure lending for maximum flexibility, identify suburbs positioned for the next growth phase, and design a portfolio balancing cash flow stability with capital growth.

Call (09) 966-5560 or visit staircase.co.nz for a free mortgage and investment review.

Our Last Word

The RBNZ’s bold cut unites the four majors: Kiwibank’s “go big,” ASB’s “start me up,” Westpac’s “credit looseners,” and ANZ’s “breaking even” stability all point to the same story of a nation back on the move.

Inflation is contained, confidence is rising, and property is again a driver of New Zealand’s economic engine. The turning point is here don’t just watch the recovery, climb it with Staircase.

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This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication. To the extent that any information or recommendations in this publication constitute financial advice, they do not take into account any person’s particular financial situation or goals. We strongly recommend readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication. No person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any advice, opinion, information, representation, or omission, whether negligent or otherwise, contained in this publication.