RBNZ data shows Property Investors positioned for further OCR cuts in 2025

Property investors are increasingly positioning themselves to take advantage of easing interest rates.

Recent data from the Reserve Bank of New Zealand (RBNZ) highlights a growing preference for short-term fixed-rate loans, reflecting confidence in lower borrowing costs ahead.

In October, 82% of investors had loans due to mature within the next 12 months—up from 68% a year earlier and 63% in October 2022. This significant shift suggests investors are prioritising flexibility as they anticipate relief from the current high-interest-rate environment.

The Official Cash Rate (OCR) currently sits at 4.25%, with market consensus leaning towards a 50-basis-point cut at the upcoming RBNZ meeting on 19th February.

The RBNZ’s latest Monetary Policy Statement, released alongside the November OCR decision, projects the OCR declining to 3.5% by the end of 2025.

However, some analysts argue that a drop to 3.5% may not be sufficient to stave off an economic slowdown. They forecast a more aggressive easing cycle, with the OCR possibly dipping closer to 3% by late 2025.

Regardless of the exact trajectory, one thing is clear: investor cash flow is poised for significant improvement in the coming year.

With borrowing costs expected to ease, the financial landscape for Property Investors could shift markedly in 2025, offering welcome relief to those navigating the current high-interest environment.

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.