Interest Rates, Recovery, and Your Property Plans

With the recent shifts in monetary policy, it’s worth asking: what do economists from Westpac and Kiwibank think about where interest rates, and by extension the New Zealand property market are headed? And why should you care?

Westpac: Easing Has Begun, Recovery Is Uneven

Westpac’s economists note that rate cuts are starting to show up in the economy, with more expected this year and next. They forecast the official cash rate tracking towards 3 percent.

Their key points:

• Mortgage relief is slowly reaching households and property buyers

• Growth remains patchy and some sectors are stronger than others

• Confidence is improving, and lower rates should lift market activity

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Kiwibank: More Cuts Needed, Recovery Building

Kiwibank’s team expects the Reserve Bank to cut rates by another 75 basis points over the next year, bringing the cash rate closer to 2.5 percent.

Their take:

• New Zealand is coming out of a tough recession, but recovery will be gradual and uneven

• Real progress should show in the second half of 2025 and gather pace into 2026

  
  

What It Means for Buyers and Investors

1. Lower Mortgage Costs

Westpac and Kiwibank agree that borrowing will get cheaper. This eases cash flow and improves affordability for both homeowners and investors.

2. First Home Buyers Have an Opening

As rates drop, more buyers can afford to step in. Moving early means less competition and better buying conditions.

3. The Market Will Tighten Later

Once confidence picks up, more buyers enter, stock shrinks, and prices climb. Acting too late risks chasing the market up.

4. Sellers Have Options

Vendors who position well as rates fall stand to catch early demand before the full wave returns.

Steps to Consider Now

Who	What to Do
First-home buyers	Sort pre-approval and watch rates — be ready to act
Investors	Lock in attractive fixed rates while they are available
Homeowners	Review refinancing options to reduce monthly costs
Sellers	Talk timing — early movers may get an edge before more listings hit

Key Takeaway

Westpac says the easing has begun. Kiwibank says there is more to come. Both see a slow but steady recovery in house prices over the next 18 to 24 months.

If you want to position yourself ahead of the curve whether buying, selling or just holding steady let’s chat. Good advice now will keep you ahead of the pack as rates soften and the market regains momentum.

Craig Watkins Mint Real Estate 021 308 021 www.mintre.co.nz