November wrap-up | An OCR cut and encouraging signs heading into summer
What a month November was. Last week brought the news many Kiwis were waiting for: The Reserve Bank dropped the OCR (Official Cash Rate) by 0.25% to 2.25 It was widely predicted, but still a very welcome shift heading into the end of the year, especially with the RBNZ now on holiday until late February.
Where things are sitting now
There had been plenty of expectation that the economy would gain stronger momentum in 2025, and while that hasn’t fully materialised, conversations with agents, builders and the banks suggest activity is slowly lifting. Nothing drastic, but definitely more phone calls, more viewings and more buyers becoming active.
The rate cut has also kicked off what will be a very busy period of refixing and refinancing. Many homeowners have been deliberately floating their mortgages for the last few months waiting for this final 2025 OCR call. A good number are coming off high rates that were locked in during the peak of the cycle, so the upcoming drop in repayments will feel meaningful. I am already seeing hundreds of dollars a month shaved off client budgets. That means more disposable income, which will feed straight back into the wider economy through summer and into 2026.
Lower mortgage rates will especially have a positive impact on small businesses who have had a tough run for a while. Lower mortgage repayments usually flow through into stronger discretionary spending and given how many Kiwis are small business owners, a lift in household confidence should translate to a lift in small business confidence, hiring and investment next year. Property buying from business owners also tends to follow shortly after conditions improve.
What this might mean for the housing market
The residential building sector has done it incredibly tough for more than two years now. At Colab we work closely with builders nationwide, and almost all say this has been one of the longest and hardest downturns they have ever experienced. As interest rates ease and confidence returns, we expect to see more people looking seriously at building again.
I also caught up with the team at Key2 this month. They specialise in new build sales and are seeing a genuine lift in enquiry levels and buyer engagement, particularly from people who have been sitting on the sidelines for most of the year. That momentum is encouraging and lines up with what we are seeing across the industry.
Tony Alexander’s latest Tony’s View further supports this. He notes that buyer activity is rising again, FOMO is lifting, banks are competing more aggressively for lending, and households are starting to plan for increased spending in the months ahead.
After a long and grinding slowdown, these are all the early indicators of a market that has quietly turned a corner.
November at Colab
It has been a busy month again at Colab.
We joined Fletcher Living at their Waiata Shores open day. Waiata Shores really is a great example of a master planned community done well. Good quality homes, great amenities, a friendly community feel and an incredibly convenient location near the motorway and the train station.
We also spent time in Hamilton and Tauranga meeting with local builders and developers. Always good to stay close to what is happening on the ground.
It was also great to attended the Transbuild open day which showcased their latest showhome. It is an absolute beauty and a great reminder that offsite builds can deliver real style and character. Transbuild are doing a fantastic job shifting how people think about modular construction through smart design and clever use of space. If you are considering an offsite build, keep in mind there are some unique funding requirements compared to standard builds. Happy to chat through what that looks like.
Heading into summer
December is always the time of year when everyone starts to exhale. Sun, family time, a bit of a reset and maybe even a few cold drinks in the backyard.
It is also a great chance to reflect on the year. For many clients it has been a challenging one, but this latest OCR cut brings a real sense that things may finally be turning a corner.
I will be heading overseas for a short holiday from the 13th December to the 23rd of December. I’ll still be contactable if you need anything, but will be five hours behind New Zealand so replies may be a little slower than usual.
As always, if you would like to talk through your lending, planning for the new year, or explore build or refinance options, feel free to get in touch.