Mortgages

ANZ predicts fewer OCR cuts

ANZ has revised its forecast for the official cash rate, predicting only one cut next year to 0.1%.

Thursday, January 14th 2021

The central bank rate is currently at 0.25% following emergency cuts in the wake of the Covid-19 pandemic. With the economy limping along, economists are divided on whether the Reserve Bank will slash the OCR to zero, or into negative territory.

ANZ, until now, had predicted negative rates next year, but the bank's team of economists, led by Sharon Zollner (pictured), have changed their minds.

They predict the OCR will be cut in May, but say the central bank will avoid negative rates.

ANZ's team believe monetary policy measures, such as slashing the OCR, a Funding for Lending Programme, and quantitative easing, have done their job in stimulating the economy.

Positive developments with a Covid-19 vaccine, strong commodity prices for NZ exports, and the successful elimination strategy are further reasons to suggest the RBNZ won't need to cut the OCR much further, Zollner and co said.

ANZ also noted a stronger medium term inflation outlook.

While the bank is predicting further cuts, it says the RBNZ could opt to keep rates as they are.

"If the housing market and domestic economy maintains momentum well into autumn, the RBNZ will not cut again at all," the team said in its latest report. "If Covid-19 returns to our shores in a significant way, a negative OCR will once more be game on."

"We expect the RBNZ to maintain a dovish bias for a long time yet in order to head off any premature tightening in monetary conditions that would undermine improvement in inflation and the labour market," the team added.

Comments

No comments yet

Heartland Bank - Online 1.99
The Co-operative Bank - First Home Special 2.09
HSBC Special 2.25
ICBC 2.25
HSBC Premier 2.25
Kainga Ora - First Home Buyer Special 2.25
AIA 2.29
TSB Special 2.29
The Co-operative Bank - Owner Occ 2.29
SBS Bank Special 2.29
Westpac Special 2.29
Heartland Bank - Online 2.35
ICBC 2.35
HSBC Premier 2.35
TSB Special 2.49
SBS Bank Special 2.49
The Co-operative Bank - Owner Occ 2.59
BNZ - Classic 2.59
ASB Bank 2.59
AIA 2.59
China Construction Bank Special 2.65
Kiwibank Special 2.65
HSBC Premier 2.89
TSB Special 2.99
AIA 2.99
Westpac Special 2.99
ICBC 2.99
ASB Bank 2.99
China Construction Bank Special 2.99
BNZ - Classic 2.99
SBS Bank Special 3.19
Kiwibank Special 3.19
The Co-operative Bank - Owner Occ 3.19
Heartland Bank - Online 2.50
Resimac 3.39
Kiwibank - Offset 3.40
Kiwibank Special 3.40
Kiwibank 3.40
Bluestone 3.49
Select Home Loans 3.49
ICBC 3.69
The Co-operative Bank - Standard 4.40
The Co-operative Bank - Owner Occ 4.40
Kainga Ora 4.43

More Stories

North Shore’s a sure thing

Thursday, April 15th 2021

North Shore’s a sure thing

Auckland’s North Shore is booming, writes Joanna Mathers, and development potential opened up by the Unitary Plan is the focus for many.

Mortgaged investors still buying, but the game has changed

Wednesday, April 14th 2021

Mortgaged investors still buying, but the game has changed

March has continued a record peak for investors buying residential property.

Pandemic shifting the dial on residential design

Tuesday, April 13th 2021

Pandemic shifting the dial on residential design

From master planning entire communities to interior design, Covid-19 is reshaping the way developers, architects and designers are looking at houses and the environments around them.

Landlord polls: Rents will lift, sales will be low

Friday, April 09th 2021

Landlord polls: Rents will lift, sales will be low

Three recent landlord polls show the majority are going to lift rents in response to the Government’s decision to scrap mortgage interest deductibility against income.