8th May 2019
The OCR has dropped to 1.5%, after divided opinions from the market. This is now the lowest ever OCR. Inflation is 1.5%.
In response, the NZ dollar dropped sharply to US 0.6565 and Kiwibank and ANZ announced a slight drop in their mortgage rates. The OCR drop is to try to kick start a slowing economy. Domestic growth slowed in the last six months of 2018.
Next OCR review is Wednesday 26th June 2019.
Reserve Bank restrictions are still in place:
– From 1st October 2015 Bright Line Test, capital gains tax for investors who sell within 2 years of purchase.
– From 9th June 2016 banks will no longer lend to non-resident borrowers with overseas income. The maximum allowable LVR for NZ citizens and permanent residents with overseas income is now 70% (from 85%). Borrowers on temporary resident visas will only be accepted if they have both a NZ address and NZ based income.
– From 29th March 2018 Bright Line Test, capital gains tax for investors who sell within 5 years of purchase.
– From 3rd January 2019 banks require residential investors to have 30% equity or deposit nationwide, not just for Auckland.