New Zealand home prices will rise slower than previously expected through 2027 as a fragile economy weighs on buyer confidence despite aggressive monetary policy easing, a Reuters poll of property analysts showed. To revive an economy that slipped into recession last year the Reserve Bank of New Zealand (RBNZ) has slashed interest rates by 250 basis points since mid-2024 to 3.00% at its August meeting and also surprised markets by signalling more cuts by year-end. However, lower rates haven't sparked a rebound in housing demand like in neighbouring Australia.
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The hit to New Zealand confidence caused by global uncertainty will fade as businesses get used to a time of heightened economic policy unpredictability, the chief economist at the country’s central bank said on Friday, Reuters reported. Paul Conway, chief economist at the Reserve Bank of New Zealand, said the confidence shock will pass and business will “just get on with it.” "I fully expect uncertainty to persist into the future but to some extent, we get used to it,” Conway told Reuters in an interview. "We can't sort of wait and see what's going to happen…forever," he said.
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New Zealand's central bank cut its policy rate by 25 basis points to a three-year low of 3.00% on Wednesday, and flagged further reductions in coming months as policymakers warned of domestic and global headwinds to growth, Reuters reported. The central bank's dovish tone caught markets offguard and sent the New Zealand dollar tumbling 1.2% to a 4-month low at $0.5817, while two-year swap rates slumped as deep as 2.93% -- their lowest level since early 2022.
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A top New Zealand central banker said on Thursday that while the full impact of U.S. tariffs remains uncertain, they could ease medium-term inflation pressures in the country, although the tariffs might dampen business investment and household spending, Reuters reported. As countries redirect exports away from the United States, falling import prices may help lower domestic inflation, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said in a speech at Business New Zealand. "There's a whole lot of 'wait and see' going on out there right now," Conway said.
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New Zealand's central bank held the benchmark interest rate at 3.25% on Wednesday, noting near-term inflation risks, but said it expected to loosen monetary policy if price pressures continued to ease as forecast, Reuters reported. The decision was in line with a Reuters poll in which 19 of 27 economists surveyed projected the Reserve Bank of New Zealand would hold the cash rate for the first time since it started a cutting cycle in August 2024.
Failed Mosgiel businessman Malcolm Burns - who owes creditors millions - has finally been declared bankrupt despite a last-ditch effort to delay the decision a fourth time, the Otago Daily Times reported. Associate Judge Dale Lester declared Mr Burns bankrupt in the High Court at Dunedin on June 12 after the previous week giving him "a last chance" to pay what his company Otago Excavation owes vehicle leasing business FleetPartners Group.
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