Mortgage Rate Cut Gives Kiwis Some Breathing Space

The Reserve Bank has cut interest rates to help ease pressure on Kiwi households and the economy.

Ray White’s chief economist, Nerida Conisbee, says this comes as more people are struggling to find work and many New Zealanders are leaving the country. Unemployment rose to 5.2% in June – the highest since 2020 – and underemployment is also up. In the year to June 2025, almost 72,000 Kiwis left the country, the most in 13 years.

With inflation under control at 2.7%, the Reserve Bank felt there was room to reduce rates. This should make mortgages cheaper, giving relief for homeowners and helping buyers get back into the market. Banks are expected to pass on the rate cut within the next 2–3 weeks.

The housing market is steady, with the national median house price around $781,000 and plenty of properties for sale. This rate cut could help encourage more buying and selling, especially in areas like Auckland, where unemployment is higher at 6.1%.

Ray White New Zealand CEO, Daniel Coulson, says the cut is part of a longer trend of easing rates, but future cuts may be less frequent. Lower borrowing costs give buyers and sellers more confidence, and this move is a reminder that now could be a good time to make property decisions rather than waiting.

Overall, the rate cut is about giving Kiwis some support while jobs and the economy adjust, and the Reserve Bank is keeping a close eye on things to make sure households and businesses have confidence in the months ahead.