Today the RBNZ lowered the official cash rate (OCR) by 25 basis points to 2.25%, the lowest level in about three years. This move reflects a broad aim: support households and businesses, ease borrowing costs and help stimulate economic activity at a time when inflation remains at the top end of the target range but is expected to come down next year.
What this means for you - especially if you’re after a new build
- More affordable borrowing: Floating-rate mortgages will likely become cheaper and many banks have already started cutting their floating rates following the OCR drop. That makes now a good time to secure a home loan - particularly beneficial for buyers opting for new build homes or house & land packages.
- Better borrowing capacity & serviceability: As interest rates dip, your monthly repayments drop - or you might be able to borrow more for the same repayments, giving you greater scope when budgeting for a home and land package, or even a dual-key / home-and-income build.
- More competition among banks - and possible incentives: With many borrowers looking to lock in lower rates before year-end, lenders often offer promotional cashback, better test rates and competitive fixed-rate deals.
- Confidence boost for new builds market: Lower rates tend to encourage borrowing and spending. According to the RBNZ’s latest Monetary Policy Statement, low interest rates and favourable export conditions are already supporting economic activity and there are signs of increased construction of new homes. For developers, investors and buyers - this could mean more supply, more choice and potentially better deals on new build projects.
What to keep in mind
- While floating rates should drop now, fixed rates only adjust when existing fixed-term contracts expire or are renegotiated.
- The RBNZ has signalled this may be the last cut for a while - future OCR decisions will depend on how inflation and broader economic conditions evolve.
- If you’re looking at a new build or land & house package, acting sooner may secure the best financial conditions while banks are competing aggressively.
Takeaway for New Build Buyers & Investors
If you’ve been waiting on the sidelines - now is a potentially great moment to take action. Lower borrowing costs and increased lender competition create a favourable environment for securing pre-approval or moving forward with a land purchase, house & land package or new build.
At KEY2 Real Estate, we specialise in new builds, land sales, house & land packages and dual-key home and income properties. With today’s OCR drop we expect uptake on new builds to increase - so let’s help you find the right land or home to fit your lifestyle or investment goals.
Ready to explore? Get in touch and we’ll show you what’s out there - and what’s coming soon.
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