18th Jully 2025
 

The Reserve Bank of New Zealand (RBNZ) has held the Official Cash Rate (OCR) steady at 3.25% in its July 2025 announcement. While this decision was expected, the real shift lies in the declining mortgage rates offered by banks—now dipping below 5% for many fixed-term loans.

Why the OCR Matters

A stable OCR suggests the RBNZ is taking a cautious approach, allowing previous rate cuts to filter through the economy. Inflation remains near the upper end of the 1–3% target band, and economic recovery is uneven across sectors. Banks Lower Lending Rates Despite the unchanged OCR, banks are offering more competitive mortgage rates:

1-Year Fixed: ~4.89%

2-Year Fixed: ~4.89%

3-Year Fixed: ~4.99%

This divergence is creating a more favorable environment for homebuyers.
Housing Prices at a Low: Bargain Opportunities

One of the most notable trends in the current market is the softening of housing prices across many regions. With banks actively lending and interest rates falling, buyers are in a strong position to secure properties at discounted prices. This creates a window of opportunity for both investors and first-home buyers.
What This Means for Real Estate Agencies

1. Buyer Activity is Rising Lower interest rates and falling prices are encouraging more buyers to enter the market.
2. Changing Buyer Preferences Buyers are more open to stretching their budgets or exploring long-term investments like new builds.
3. Competitive Listings Agencies must differentiate themselves with strong marketing, digital tools, and personalised service.
Business Performance & Profit Expectations

Real estate agencies are likely to see improved revenue performance in the second half of 2025 due to increased transaction volumes. However, profit margins may remain tight due to: High operational costs Competitive commission structures

The Key to Success: A Variable Cost Model

A crucial strategy for achieving profitability in any market condition is adopting a variable cost model. This approach aligns expenses with income, ensuring that costs scale in proportion to revenue, protecting the business from financial strain during slower periods.

The Advantages of a Variable Cost Model in Real Estate This includes:

• Outsourcing marketing or admin tasks on a per-listing basis
• Leveraging cloud-based tools instead of fixed office infrastructure

In this shifting market, agility is everything; and we’re here to help. Whether it’s smarter marketing, cost-effective admin solutions, or digital tools that scale with your business, we can partner with you to navigate the upswing efficiently and profitably.
Stay profitable. Stay competitive. Stay ahead.

Please contact your Bentleys advisor if you require any additional information.

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