Property Investors bet the house on further rate cuts: Latest lending data

Property investors are increasingly favouring short-term fixes, reflecting growing anticipation of official cash rate (OCR) cuts, according to the latest lending data from the Reserve Bank.

In July 2024, a whopping 65% of property investors locked in mortgage rates for either six months or one year, compared to just 37% doing the same in July 2023.

This shift highlights a significant change in borrowing behaviour, driven by expectations of falling interest rates. Notably, these decisions were made before the Reserve Bank’s OCR cut on 14^th August, signalling investors’ near term views.

Meanwhile, the appetite for longer-term fixes has diminished sharply. Only 7% of investors opted to fix for two years or more in July 2024, a stark contrast to the 44% who did so in July 2022.

Just two years ago, with rates on the rise, locking in longer-term rates was a more attractive option for many. Now, with rates expected to fall, short-term fixes have become the strategy of choice.

These figures reflect the cyclical nature of the interest rate environment and the changing sentiment among property investors. Two years ago, rising rates prompted many to secure longer-term deals.

Today, with the possibility of rate cuts on the horizon, investors are positioning themselves to take advantage of what could be a more favourable borrowing climate in the near future.

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.