Mack dadunk...
heres the RBNZ OCR statement...

date 24 July 2008

The Reserve Bank today reduced the Official Cash Rate (OCR) from 8.25 percent to 8.0 percent.

Reserve Bank Governor Alan Bollard commented that “more unpleasant international news has emerged since the June Monetary Policy Statement, and there is a risk that the domestic economy will slow further. Moreover, the cost of funds raised abroad by banks has been rising in recent months as the international financial situation has deteriorated. Today’s cut will help to mitigate the effect of these increases on the actual borrowing costs paid by firms and households.

“Recent oil and food price increases mean that annual CPI inflation should peak around 5 percent in the September quarter of this year. However, we expect that inflation will return inside the target band in the medium term. The weaker economy is expected to reduce pressure on resources, making it more difficult for firms to pass on costs and for higher wage claims to be agreed.

“Economic activity is likely to remain weak over the remainder of 2008. The ongoing correction in the housing market, together with the very high oil prices, will limit household spending and constrain the extent of recovery. However, high export prices and an expansionary fiscal policy are expected to contribute to a gradual pickup in activity through 2009.

“Consistent with the Policy Targets Agreement, the Bank’s focus will remain on medium-term inflation. In this regard, it is important to note that monetary policy has been reasonably tight for some time, and is now restraining activity and medium-term inflation pressures. Provided that the outlook for inflation continues to improve and there is no excessive exchange rate depreciation, we would expect to lower the OCR further.”


"The novice property investor who prattles on about not locking in loans has a lot to learn"

mackdunk, Id like to make a bet with you... but you never take my bets on...
Aggregate demand is falling and therefore inflation is going to fall after its peak in a few months...its a fact... its a cycles game... Interest rates have stayed the same or risen every time over the last 5 years, and now a new cycle has started... We are on a new Interest rate cycle where OCR will be percents lower in 5 years as to where it is now!
8% now... in 5 years the OCR will be 6% or less...Probably much closer to 4.5%....
do you want to bet on it...?
I agree, "get the numbers right"... getting the numbers right means your loan should be floating...
Its a risky game trying to time it or risking numbers that might pop out the hat in tomorrows mareket. Macdunk-
Being a future homebuyer (minimoke, im not all talk, a doer here)... I have to take on these sorts of risks ie waiting for the market to bleed dry, get floating interest rate.. I have to take all the 'givens' that I can... Property prices are so expensive for us future first time homebuyers, that we can not take things for granted like you buffs do... I can not blatently pay more in interest payments just so I can have a set interest payments figure.....Man, you just brush that dirt off yah shoulder as if it were crumbs...

.^sc