The Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) at 2.25% in its first decision of 2026, flagging it expected inflation to soon return to target levels and the economy to grow over the year ahead.

The hold decision was widely expected by economists following a period of tightening, with the central bank saying it wanted to carefully monitor incoming data before indicating likely future directions.

Since August 2024 the RBNZ has aggressively cut the OCR from the cycle peak of 5.5% as it has tried to stimulate the economy while also looking to control growing inflation pressures, which have just edged outside the top of the RBNZ's 1%-3% target band.

In its written decision the central bank's Monetary Policy Committee said the economy was at an early stage in its recovery with ongoing strength in commodity prices and economic activity in the agricultural sector and regional New Zealand remaining strong.

“In response to previous cuts in the OCR, economic growth is broadening across sectors of the economy, such as manufacturing, construction and some retail. Economic growth is expected to increase over 2026.”

Inflation was most likely returning to within the bank’s 1 to 3 percent target band in the current quarter and the Committee was confident that inflation would fall to the 2 percent midpoint over the next 12 months due to spare capacity in the economy, modest wage growth, and core inflation within the target band. 

“House price growth is expected to gradually increase over 2026 and then grow at around the rate of household income growth over the medium term,” it added. 

Raine & Horne New Zealand General Manager James Shepherd welcomed the positive outlook and central bank comments that the country was entering a period of economic growth. This strongly suggested that now was a good time for sellers who had been sitting on the sidelines waiting for the right conditions to enter the market.

“Open home attendees rose from 923 in December to 1,704 in January — an 84% month-on-month increase according to Raine & Horne’s January 2026 data. While December is typically a quieter period, the rebound highlights renewed buyer activity and competition, making now an opportune time to list, particularly with an early Easter approaching,” James said.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.