May 2025 market update – what’s happening with rates and lending?
The next OCR announcement is due on 28 May, and many experts are expecting a cut from the Reserve Bank by another quarter of a percent again.
We’ve already seen banks trim rates on the 1 and 2-year fixed terms. These are now sitting around the 4.99%p.a. mark, which are sharp by historical standards. If we see a further drop, we could even see 3-year rates break below 5%p.a.
Banks continue to ease credit criteria as the Reserve Bank’s new DTI (debt-to-income) rules come into effect. One of the biggest updates this month comes from ANZ, who have now extended interest-only terms for investors to 10 years. This will be a relief to many investors who’ve faced the pain of reassessments and tighter cash flow at the end of their interest-only terms.
Bright-line and Interest Deductibility – Key Updates for Investors
The government has confirmed the following updates from 1 July:
Bright-line Test
From 1 July 2024, the bright-line test applies if you sell a property within 2 years of purchasing.
For property sold before 1 July 2024, the current 5 and 10-year rules still apply.
You can read more about that here.
Interest Deductibility
From 1 April 2024 to 31 March 2025, investors can claim 80% of interest expenses.
From 1 April 2025, full 100% deductibility will be reinstated.
Find out more here.
What we’ve been up to
It’s been a busy start to May for the Colab team. We’ve been out and about connecting with developers and builders around the region, and we’re really encouraged by the momentum we’re seeing.
One of the highlights was the Property Investor Evening with Fletcher Living, where we had a great turnout and strong engagement from buyers and investors alike.
We’re big fans of Fletcher’s masterplanned communities like Park Green and Waiata Shores. Not just for their layout and amenities, but for the long-term value they offer. With good access to public transport, quality design, and solid rental yields, they’re well worth a look whether you’re a first home buyer or an investor looking to diversify.
Busy this Sunday, 18 May?
If you’re out and about this Sunday, check out the open day for Aedifice’s Kohe development. It’s a well-designed community in a great location, with titles expected in 2026. With proximity to transport links and a strong overall masterplan, it’s one to keep an eye on (details below).
We also caught up with Stonewood Homes Hamilton this month. Their passion for the industry is clear, and the team bring a wealth of experience in both construction and client care. If you’re looking to build in the Waikato region, we’d definitely recommend getting in touch with him. You can find out more here.
And if you’re based in the Franklin area...
Keep an eye out for the Hive Homes Design Centre in Pukekohe – an exciting new space dedicated to home design and innovation. Check out Hive’s Facebook page for updates and upcoming events.
Thinking of Making a Move?
Whether you’re looking to invest, build, or just want to understand your options, we’re here to help. At Colab, we work with all the major banks and a wide range of non-bank lenders, and we can help you structure your lending to suit your long-term goals.