- 1 October, 2015
- PROPERTY MANAGEMENT, COASTAL, COMMERCIAL, LAND/SECTIONS, RURAL/LIFESTYLE, RESIDENTIAL
- Interest rate, RBNZ
Falling dairy prices, thanks to slowing Chinese demand, combined with recent global economic volatility and slower economic growth have forced the RBNZ to cut rates once again.
- The national median property price rose 3.3% from June 2015 to July 2015.
- The national median property price has risen 11.8% over the year to July.
- 8,121 dwellings sold in July 2015, up 37.8% on July 2014.
- Auckland’s median price fell -2.35% from June 2015 to July 2015.
- Inflation remains low with CPI up 0.4% in Q2 and up 0.4% over the year to June.
- The NZ dollar softened over the past month to around US$0.63.
- Unemployment sits at 5.9% while annual wage inflation is up 1.6%.
Effect on property markets
The combination of three consecutive interest rate cuts is expected to further boost buyer demand across the country’s property markets. The latest REINZ data shows that Auckland prices dropped -2.6% during the month of June. This was thanks to an ongoing low supply of listings which has seen buyers begin to look for opportunities in other regions. This latest interest rate cut is expected to see price growth outside Auckland continue. In addition, a lower NZ Dollar will also make purchasing property more attractive to offshore buyers; especially given the recent volatility in the Chinese equity markets.
Ongoing low levels of inflation, soft dairy and commodity prices combined with lower than expected economic growth should provide the RBNZ with additional room to cut interest rates further over the remainder of 2015.
The next RBNZ OCR meeting will be held on the 29th October 2015.