OCR warning: Why homeowners should prepare for two more rate rises this year
Economist Ed McKnight warns New Zealand homeowners to prepare for two additional Official Cash Rate (OCR) increases this year following a surprise hike to 2.5%. The report notes that many borrowers are opting for longer-term fixed mortgage rates to mitigate uncertainty in the current economic climate.
Why it matters
Rising interest rates directly impact housing affordability and household disposable income, signaling a tightening of monetary policy that affects the broader real estate market.
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The five things you need to know about the housing market this week.
Many commentators, myself included, expected the Reserve Bank to hold the Official Cash Rate at 2.25% last week, but instead it took the OCR to 2.5% -the first OCR rise in over three years. Of course, the rise wasn’t a complete surprise. After all, the Reserve Bank had signalled, even before the Iran war, that it would raise the OCR this year.
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