Lending data suggests Investors believe we are at peak interest rate

A fresh data series from the RBNZ shows that, over the last 12 months, Property Investors have shifted their borrowing towards shorter fixed terms.

The latest figures (which are for new borrowing in January 2024) show that 54% of lending to Investors was fixed for either 6 months or 1 year.

1 year prior, in January 2023, that figure stood at just 28%, so that represents a huge shift in borrower behaviour.

Conversely, the percentage of loans being fixed for 2 years or more has dropped from 40% in January 2023, to just 17% in the latest January 2024 release.

Property Investors clearly believe that OCR cuts are not far away, and that lower mortgage rates will soon become available.

Financial Markets tend to agree with Investors.

The Interest Rate Swaps market pricing implies little chance of a cut for the 10 April, 22 May and 10 July OCR announcements, but they see a greater than 50% chance of a cut at the 14 August meeting.

Time will tell.

Oliver Pearson

Manager and Property Investor for 20+ years

Oliver Pearson

Manager and Property Investor for 20+ years

Oliver Pearson began investing in property aged 21 and has since bought, developed and sold real estate in the UK, USA, South East Asia and New Zealand. After a career in banking he is now on the management team at Waikato Real Estate and has contributed to property articles for NZ Herald, Stuff and Property Investor Magazine.

Based in Raglan, Oliver's passions extend beyond property to surfing, hydrofoiling, and providing a taxi service for his children.