OCR rise likely to raise mortgage rates
Tuesday 3 February 2004
Against expectations, Reserve Bank governor Alan Bollard raised his official cash rate (OCR) from 5% to 5.25%, citing stronger than expected household spending and activity in the construction and housing market.
By The Landlord"By raising interest rates now, we hope to avoid having to increase interest rates more aggressively later on," Bollard said on announcing the increase.
Bank of New Zealand economists had seen today’s decision as a close call. Senior markets economist Craig Ebert says the central bank’s focus is very much on the economy.
"It’s so strong and operating pretty much above its long-term sustainable level," Ebert says, noting that unemployment is very low and tracking lower and that the housing market is "going ballistic."
Read More - Opens in a new window
Commenting is closed
There’s been a rallying of the market with the latest REINZ data showing both sales volumes and median house prices noticeably up with the onset of Spring.
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.