Trusted Property Management

The Reserve Bank significantly cut the Official Cash Rate (OCR) to 2.25%, making home loans cheaper, reflecting an economy with spare capacity despite early recovery signs. While the interest rate cycle appears to have bottomed out, the bank notes persistent upside risks to inflation and anticipates only mild house price increases in 2026. Given these uncertainties and projected economic growth, Tony Alexander suggests considering fixing mortgage rates for 3-5 years or splitting terms to manage risk.

The recent OCR cut has led to a marginally more positive economic outlook, with consumer spending intentions improving and businesses showing cautious optimism about future revenues. However, actual boosts in spending and hiring are likely to remain constrained by a weak labor market and employment insecurity. For the housing market, while prices have stabilized and are showing slight increases, a strong, immediate boom is not anticipated due to ongoing labor market challenges and investor-related restraints.