OCR holds at 2.75%, but three of seven wanted a hike

The members who voted to hold weren’t ignoring inflation. They wanted more evidence before acting. According to Kelvin, their main reasons were:

• Inflation expectations look steady. These are what businesses and households expect prices to do, and they remain “under control, at least for now.”
• Businesses aren’t rushing to raise prices. There’s only “fairly limited” evidence that firms want to lift their prices or profit margins.
• The economy is still sluggish. As Kelvin puts it, “the economy isn’t yet firing on all cylinders either.”

Here’s the catch. Core inflation, which strips out volatile items like petrol and fresh food, has risen. The Reserve Bank now expects headline inflation to climb from 3.7% in the September quarter to 4.4% in the December quarter.

“More OCR rises remain on the cards; it was just that the (slight) majority of members wanted to wait a bit longer before moving again,” Kelvin says.

His pick for the next move? “December 9th seems pretty likely now.”

There is some good news for the property market. If the economy gets through the current uncertainty, Kelvin expects unemployment to fall over the next year or so. More people in work usually means more buyers and firmer prices.

But mortgage rates could also keep rising, and they tend to have the bigger effect. “The past 5 to 6 years have shown yet again that it’s credit availability and cost which tends to drive the housing market in the short to medium term,” Kelvin says.

In plain terms, how much people can borrow, and what it costs them, matters more than almost anything else.

Don’t expect a sudden boom. Kelvin says “it seems unlikely that property sales activity or house prices are suddenly going to race away again anytime soon.”

If you’re buying: You probably don’t need to rush to beat a price surge. Rising mortgage rates are the bigger risk, so plan your budget around rates being higher than they are now.

If you’re refixing your mortgage: Many borrowers are already locking in for longer. “It wouldn’t be a surprise to see more borrowers continue shifting towards longer-term fixed mortgage rates as insurance against even higher costs later,” Kelvin says. Fixing for longer gives you certainty, but if rates drop later you’ll miss out. Talk to your bank or a mortgage adviser about what suits you.

If you’re selling: Buyers are likely to stay careful and focused on what they can afford. Pricing realistically from the start will count for more than ever.

Catch up on previous OCR updates and commentary:

• The OCR climbs to 2.75%, September 2026

• OCR hits 2.5%: What a unanimous rate rise means for buyers, August 2026

• The OCR holds at 2.25%, but is a July increase on the cards?, May 2026