Bollard cuts the OCR - spring in sight?

Just as the last of the extreme weather front went through on Thursday morning, Reserve Bank governor Alan Bollard announced a cut in the official cash rate to 8 per cent, the first time since 2003. This piece of good news helped to counter balance the news of Hanover Finance’s difficulties announced Wednesday evening. There is no doubt that this is proving to be the winter of our discontent, but maybe, just maybe, we have weathered the worst of it. Oil prices are falling, sure this economic climate will not be a quick fix, but we have noted canny buyers rightly assessing this as potentially the best time to buy. With financial analysts pricing in five further rate cuts by March next year, the expectation is that the OCR could be around 7% at that time. Putting two and two together going forward, buyers waiting in rental accommodation in anticipation of an ongoing softening in the housing market, may now want to reassess their options.