New Zealand’s economic recovery is gathering pace, providing a sense of optimism that 2026 will be a year of steady growth and increasing prosperity.
While the first half of 2025 was mired in global trade uncertainty, New Zealand’s exports continued to hold up well. US tariffs have now been removed from export goods worth more than $2 billion, including beef and kiwifruit, which will support our thriving primary sector. We’re already seeing profits from the primary sector flow into other parts of the local economy, with South Island regions leading the nationwide recovery. Job ads have picked up too, with SEEK reporting a 7% year-on-year increase for October.
What about the housing market? There’s a lot more activity, with sales up 6.4% compared to last year. Overall, house prices are still flat, but it depends on your region; West Coast medians are at all-time highs, while prices in the Wellington region are down. In the construction sector, there are more cranes on the skyline, “showing tentative signs of revival”.
To help water these green shoots, the Reserve Bank (RBNZ) made their final cut to the OCR for 2025, bringing it down to 2.25%. The forecast for 2026 is that the OCR will remain steady, with RBNZ ready to move in either direction depending on how fast the economy improves.
The lower OCR is great news for mortgaged households, but it does hit savers and retirees in the pocket. Term deposit rates are approaching 3%, with on-call bank interest rates typically below 1%.
What’s happening at Zagga?
Zagga’s rates have remained steady over the last two months, a reflection of the urgency of these loans in many cases, not their quality. While we’ve done our best to continue with our rates above 7%, expect these to fall below 7% in 2026 as we meet the market’s pricing.
However, while rates are falling, this does mean increased borrower activity, which you will have seen particularly over November and December through a surge in quality loan investment opportunities. Furthermore, with property prices static or rising in some areas, this will help LVRs stay stable or even decrease during the term of some loans.
New loan investments
While we’re not getting close to the end of the year for any new loans settled, we do have two new loans under assessment currently, close to release.
These investments could be the final chance to secure returns over 7% for a while, so please get in touch if interested to hear more.