At the time of writing (27 November 2024), I am reviewing an abundance of headlines following the Reserve Bank of New Zealand’s decision to reduce the Official Cash Rate (OCR) by 50 basis points to 4.25%.

This move was anticipated, with projections indicating a further 50-basis-point cut in February, aiming for an OCR of approximately 3% by mid-2025.

ASB’s Executive General Manager of Business Banking, Rebecca James, remarked:
“Today’s rate drops will make a meaningful difference to many individuals, households, business owners, and farmers across the country.”

BNZ’s Executive for Customer, Products, and Services, Karna Luke, added:
“With Christmas approaching and many households managing their budgets carefully, lower interest rates should help make a difference for New Zealanders.”

Kiwibank’s Pervan observed:
“As interest rates decrease, we are seeing signs of increasing confidence and movement in the housing market.”

Grant Knuckey, ANZ NZ Managing Director for Personal Banking, noted:
“It’s been a tough year for the New Zealand economy and for many of our customers. Hopefully, the interest rate changes will provide some relief as we head into the Christmas season.”

While these reductions are encouraging, it’s important to remain cautious due to ongoing economic challenges, including rising unemployment and international geopolitical tensions.

That said, New Zealand’s housing market is showing signs of resilience. The national average asking price for a property in October was $848,900, up 3.1% from September and representing the strongest month-on-month growth in close to three years. Additionally, a net 24% of New Zealanders expect house prices to increase, up from 13% in the previous quarter, indicating growing confidence in the market.

At Goodwins, our team is nearing the end of what many will agree has been an exhausting 12 months. Like many, we are hopeful for warm weather and a festive Christmas/New Year holiday period.

Still, keeping our finger on the pulse, I was pleased this week to learn that significant progress has been made toward enacting the Residential Tenancies Amendment Bill (RTA Bill), introduced in May 2024. The Bill has now returned from the Select Committee with recommendations. You can read the Committee’s report here.

The next stage for the Bill is the Committee of the Whole House. You can learn more about the Bill and track its progress on the Parliament website here. We are closely monitoring this and will keep you updated on the progress of the Bill.

Key changes we expect to be in-place early next year:

  • Terminations: Reintroducing 90-day “no cause” terminations for periodic tenancies and allowing landlords to end a fixed-term tenancy without a specific reason at the end of the term.
  • Notice Periods: Returning landlords’ notice periods for ending a periodic tenancy to 42 days in certain circumstances.
  • Tenancy Tribunal: Granting the Tenancy Tribunal new powers to decide disputes without requiring an oral hearing.
  • Technical Amendments: Implementing technical changes to improve the clarity and efficiency of the Residential Tenancies Act.

Key examples of the committee’s recommended changes, which have now been adopted in the Bill include:

  • clarifying rules for consenting to and refusing requests to keep a pet, by expanding and clarifying grounds for refusing a request, and adding a non-exhaustive list of reasonable conditions that a landlord may attach to their consent;
  • simplifying the smoking provisions, by allowing the prohibition of smoking inside while allowing for a case-by-case assessment elsewhere on a property; and
  • strengthening protections for tenants by extending existing rules for retaliatory terminations, which prohibit a landlord from terminating a tenancy in response to legal actions taken against them.

As-always, we will keep our landlord clients informed as these developments unfold.

If however, you have more pressing questions or need specific assistance, please don’t hesitate to reach out.

P.S. If you know someone who could benefit from our services, please refer them to us Referral Rewards for existing clients.

We’re here to help more clients achieve their real estate goals!