The OCR Outlook: April 2025 Predictions and Impacts Artwork

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The OCR Outlook: April 2025 Predictions and Impacts

April 08, 2025 • Zebunisso Alimova

0:00 | 4:05

Mortgage relief or savings squeeze? The April 9th OCR announcement looms large with significant implications for Kiwi households. We're predicting a modest 0.25% drop, which could provide welcome breathing room for the mortgage holders currently floating and waiting for the right moment to fix.

The impact of this anticipated change cuts both ways across our economy. While homeowners might celebrate potential mortgage relief, we unpack the challenging reality for retirees and others dependent on interest income from savings. With banks already offering two-year fixed rates at 4.99%, we examine whether now might be the time to lock in your mortgage.

Real estate dynamics are shifting as well, with increased activity among both first-home buyers and investors despite ongoing economic uncertainties. For many families, any financial relief from lower mortgage payments must be balanced against the rising costs of rates, power, and insurance. This delicate economic equilibrium affects nearly every household in different ways.

Whether you're looking to get on the property ladder, managing existing mortgage commitments, or planning your retirement investments, understanding these OCR implications is crucial. Listen now for our complete analysis and predictions on how this announcement might affect your financial situation in 2025 and beyond. What financial moves will you make in response to the changing economic landscape?

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Welcome and OCR Discussion Setup

Speaker 1 0:10

Hello and welcome back to the episode with Kunj . Hello , Kunj , Hello , how are you ? Oh pumped . What are we talking about today ?

Speaker 2 0:18

I thought we'd talk about the OCR because it's come around again . Hey , we just did an OCR topic in February . Yes , we did , and now we've got another official cash rate announcement on Wednesday , so the 9th of April . Okay , what ? Are your predictions . What do you think is happening ? Well , so the 9th of April ? Okay , what are your predictions ? What do you think is happening ? Well , I still think there's going to be a drop . Okay , yeah , I just don't think it'll be a 50 point drop . Yeah , I think it's a 25 point drop .

Speaker 2 0:45

Yeah , that's my gut feeling as

Predictions for April's OCR

Speaker 2 0:47

well With seeing where the economy is heading .

Speaker 1 0:49

Yeah , I think things are stabilising .

Speaker 2 0:52

Well , I think I read something about it creeping up a little bit inflation , so I think they still need to probably want to get a handle on that . So OCR is sitting at 3.75% at the moment , so 25 points that will make it sit at 3.5 . What ?

Speaker 1 1:15

does it mean to an everyday person ?

Speaker 2 1:17

Well , if you're a homeowner everyday person homeowner it could possibly help with the interest rates for your

Impact on Mortgage Holders

Speaker 2 1:27

mortgage . Could push them down a wee bit .

Speaker 1 1:31

We have few on floating at the moment waiting for the drop .

Speaker 2 1:34

I think about 80% of New Zealand is still sitting on floating mortgage rates waiting for that right time timing the market to you know fix in their mortgages to try and get something below a five , yeah , but there's some really good rates regardless , right ?

Speaker 1 1:50

I mean , some of the banks have dropped since the last one . I mean two-year rate 4.99 . Yeah , any time of the banks have dropped since the last one , and two-year rate 4.99 , yeah , any time of the day . I think that's a good rate . Anything below five , yes , is usually a good rate if you're a long-term person , but I do feel sorry for my older clients that are selling up and retiring and they've got cash , yeah yeah , what was the ?

Speaker 2 2:13

um interest rates ? So savings and investment interest rates , or term investments , um tend to trend down as well when the official rates trend down . So yes , if you've got money in the bank ,

Effects on Retirees and Savers

Speaker 2 2:25

it's um not favorable for you at the moment . See how slow I said that . I'm sorry it's coming down .

Speaker 1 2:34

Yeah , so unfortunately , you know , there is always winners and losers in every scenario , but we do hope that with the drop of the OCR , our first homebuyers , especially , will be winning . You know , getting back on the property ladder , we are seeing more activity there from real estate agents in the first homebuyer space . We're seeing more activity amongst the investors as well . Now

Housing Market Activity

Speaker 1 2:55

going back into it , yeah , but again the uncertainty is with the government , jobs and people losing their jobs and what's happening in the property market there .

Speaker 2 3:03

Yeah , I mean like it's going to help families who have you know it's been a bit tight at the moment with the higher interest rates for them for their mortgage repayments as well and things like that . But also , you know you're seeing um rates going up , you're seeing the power is going to go up um as well , and then you've got insurance as well going up . So it's actually , you know , balancing all those expenses and things as well . So with the cut and interest rate , that is going to help families who currently already do have a mortgage to manage those expenses as well .

Speaker 1 3:38

Yeah , yeah , to free up a little bit of money , awesome . Well , let's see what the next OCR brings . So we're betting on 0.25 basis 0.25, .

Speaker 2 3:48

25 this time . All right , let's go 2 pm , I think , or 2.30 . Thank you , thanks .

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