The Reserve Bank of New Zealand (RBNZ) satisfied many commentators today with a decision to leave the official cash rate (OCR) stable at 3.5 per cent for another month. This affords even more stability for those moving into property investment in New Zealand, allowing an extended window in which you could secure a home loan at current interest rate levels. 

There were many reasons given by RBNZ Governor Graeme Wheeler for keeping the cash rate steady, some of which you may not expect! 

The price of oil

Mr wheeler noted in the 29 January press release that worldwide, oil prices have fallen 60 per cent since June 2014. While this makes markets a bit more volatile, it also brings petrol prices for us here in New Zealand right down to an average of $1.73 per litre at the moment. 

This opens up more spending power for us elsewhere – or, if you're creating a financial independence strategy, perhaps more saving power. 

Open to a cut down the line

The press release stated that the next move in the cash rate could be either up or down, which Westpac chief economist Dominick Stephens found remarkable. In a Stuff.co.nz article from January 29, he noted that the RBNZ generally leaned towards tightening the market with a rate rise, but this was the first time the door had been opened to a rate cut since July 2013.

So not only may you have more purchasing power at the moment, but the RBNZ statement reached the conclusion that rates would be on hold for some time, with any changes occurring well down the line.

This offers you great stability heading into property investment. Speak to the Authorised Financial Advisers at Goodlife to formulate a great strategy to keep your financial independence coming along strong.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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