OCR Reduced by 25 Basis Points – What It Means for Auckland Property Buyers and Sellers

On 28 May 2025, the Reserve Bank of New Zealand (RBNZ) reduced the Official Cash Rate (OCR) by 25 basis points to 3.25%, marking the lowest level since September 2022. This decision, passed by a 5–1 majority within the Monetary Policy Committee, reflects a response to subdued domestic demand, declining inflationary pressures, and global economic uncertainties, notably the impact of U.S. tariffs on international trade .

Implications for the Auckland Property Market

Renewed Buyer Interest

The OCR reduction is anticipated to invigorate the Auckland property market by enhancing affordability. Lower mortgage rates, resulting from the OCR cut, reduce borrowing costs, making homeownership more accessible. This environment is particularly advantageous for first-time buyers and investors seeking opportunities in areas such as Greenlane, Remuera, and Epsom.

Impact on Mortgage Rates

In response to the OCR cut, major banks have adjusted their lending rates:

• Westpac: Introduced special fixed home loan rates at 4.95% for one-, two-, and three-year terms, the lowest among major banks for three-year terms .
• ANZ: Reduced its floating home loan rate to 6.49% and its flexible home loan rate to 6.60% .
• ASB: Lowered its variable housing loan rate to 6.44% and its 'Back My Build' loan rate to 3.99% .

These adjustments are expected to stimulate market activity by making financing more attainable for a broader range of buyers.

Seller Considerations

For property owners contemplating selling, the current market conditions may lead to increased buyer competition and potentially higher sale prices. The combination of lower interest rates and improved affordability can result in a more dynamic market with greater demand for quality properties.

Strategic Outlook

While the OCR cut provides immediate benefits, the RBNZ has indicated the possibility of further reductions, projecting the OCR to reach as low as 2.75% by March 2026 . This suggests a continued supportive monetary policy environment, which could sustain momentum in the property market.

How Harcourts Patras & Co Can Assist

At Harcourts Patras & Co, we are committed to guiding our clients through the evolving Auckland property landscape. Whether you're a first-timOCR Reduced by 25 Basis Points – What It Means for Auckland Property Buyers and Sellerse buyer, an investor, or considering selling your property, our team offers expert advice tailored to your unique circumstances. Contact us today to explore how the recent OCR changes can influence your property decisions and to discuss strategies aligned with your goals.