All posts by Jason

OCR Trimmed To 1.75%

As was widely anticipated the OCR was trimmed by 0.25% to 1.75% this morning.

Recently swap rates have been increasing. The 5 year swap rate was 2.32% back in late June, as at today its 2.72%.  This suggests an increased likelyhood of fixed interest mortgage rates rising.

FED and RBNZ Leave Rates on Hold

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.0 percent.  The Fed Funds rate in the USA was also left unchanged.

Our Governor indicated that on current projections the Cash Rate will need to fall further to ensure inflation gets up to the middle of the target range.

ANZ passes on 0.05 of 0.25% cut in the OCR

The ANZ, NZ’s largest Bank, has passed on to its floating rate borrowers a measly 0.05 of the 0.25% cut in the OCR this morning.

After announcing the cut Reserve Bank Governor Graeme Wheeler commented: “We would like to see most of (the OCR cut) passed on.”

In the OCR announcement there is a bias toward a further cut.

Property Investors need 40%

Today the RBNZ released a “consultation paper” about further lending restrictions being applied in attempt to slow down the price increases of the property market.

The majority of Property Investors will soon need a 40% deposit which is to be applied nationwide.  The Banks will start implementing this before the proposed start date of 1st September as the finger was wagged with “We expect banks to observe the spirit of the new restrictions in the lead-up to the new policy taking effect.”

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….”.