While we all obsess about the OCR, we’re missing the bigger picture
Sunday, 23 November 2025
Vanessa Williams is a spokesperson from realestate.co.nz
Opinion: Five years ago, the Official Cash Rate (OCR) wasn’t part of most Kiwis' vocabulary. It was a term that lived in the reports of economists and the minds of bankers. Discussing it over dinner? No way. Google Trends data shows we weren’t even searching for it.
With the next announcement only days away, the predictions are everywhere, and I’d bet most people with a mortgage will hear the term OCR in conversation at least once before Wednesday.
I’m all for economic literacy, but obsessing over the OCR has become a national sport. Somewhere along the way, we’ve begun treating it like the only thing that matters. But it’s not doing us any favours. It might even be hurting our economy.
I noticed the OCR tentatively entering the chat room around 2020 when we started toying with the idea that interest rates could drop below zero. “Will the bank pay me to borrow money?” We asked, hopeful. Until the mood shifted, and in 2022, the OCR became an obsession. As the OCR climbed, the closer it felt to our own bank accounts, and the more we cared. It gave us something to blame when the pressure rose, which is understandable, but only to a point.
“When will interest rates stop going up?” We whined. “We’ll take action once they start to go down.” We declared. We’ve forgotten that the interest rates we miss (sub 3%) were never normal in the first place.
Banks now talk about OCR pressure periods, because so many people hold off refixing until the announcement. In the past, we would have just refixed when the term ended, which kept the workload steady. If you know a mortgage broker or anyone in home lending, wish them luck this week.
We’ve become a nation of waiters: waiting to refix, waiting to buy, waiting to sell. But what happens when everyone waits at once? The market slows, confidence drops, and the recovery takes longer.
The Reserve Bank says that many households have stayed on higher rates for shorter periods, hoping for a sharp drop. That’s kept people’s repayments higher for longer and slowed the usual benefits that lower rates bring to the wider economy. We all want to “game the system”, but in reality, the returns are minimal.
I ran the numbers this week. At the peak in January 2022, the national average asking price was just under $1 million, interest rates were about 3.5%, and the OCR was 0.75. Today, the average asking price is closer to $850,000, and interest rates sit nearer 4.5%. With a 20% deposit, the fortnightly repayments on that average home are still almost the same as they were at the peak. The difference is about $5 less today.
The mix between principal and interest has shifted, but the basic cash flow has not moved as much as people think. It shows how easy it is to freeze when rates rise, even when the day-to-day cost of owning a home sits within the same range as it did at the top of the market. Property is a long-term investment, and any extra interest you pay won’t matter as much as you think in 5 to 10 years.
If you base your decision to buy, move, invest, or renovate on an economic factor like the OCR, you are chasing certainty that does not exist. It feels smart to wait for the perfect rate or the perfect time, but it is a trap. More data will not make the choice easier. Better rates will not make the fear disappear. At some point, you need to accept mortgage debt as a fact of life and pull the trigger. You do not buy an interest rate. You buy a home that fits your family, your financial situation and your plans. Interest rates aren’t stopping you from buying property. You are.
When you overlay the OCR with Google searches, the correlation is clear. When the OCR rises, searches spike. We let a single number dictate our confidence and confuse stress with strategy.
Things are hard right now. We see it in the supermarket aisle. We feel it when the bills arrive. And if you bought near the peak of the 2022 market with a small deposit, the slow pace of building equity has been frustrating. The cost pressures are real. However, the equity number potentially only bites when you enter or exit the market. I am yet to meet someone who bought a house 15 years ago and thinks they paid too much for it.
Most decisions come down to simple questions. Can you afford the repayments?
Does the home fit your life? Will waiting help or only delay something you already want to do?
Even experienced buyers feel unsettled by big mortgages. The difference is they know there’s never a perfect moment, and waiting for one often means missing the opportunities right in front of us.
Watch the OCR. Just don’t bet your house on it.
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