Long-term interest rates not expected to fall much further

ASB says further OCR cuts will have minimal impact on longer-term rates.

While longer-term mortgage interest rates are likely to drop further, the rate of decline is expected to slow as the OCR reaches the RBNZ’s neutral rate of 3% by the end of the year. 

This is reflected in the bank’s latest quarterly housing confidence survey which shows the number of people expecting lower interest rates has dropped from a record high of 57% to 51%.

Expectations for dropping interest rates varied across the regions, with the sharpest fall in the North Island, excluding Auckland, from 56% to 48%.