5 year swap rate collapses 7%

In response to the shock Brexit referendum our 5 year swap rate has collapsed by 7% to 2.32% today.  This is the reference rate from which the 5 year fixed housing interest rate is derived.  Odds increase for lower interest rates in the near term.

Cash Rate Unchanged @ 2.25%

The Reserve Bank today left the Official Cash Rate unchanged at 2.25 percent.  There is a bias towards further cuts with the statement “Further policy easing may be required “.

The Auckland housing market got about as strong a warning as it gets from a Reserve Bank with “Auckland house prices in particular are at very high levels….”.