Banks move quickly after Bollard drops rate

Plunging interest rates will not stop house prices falling, but they may help some people hold on to their homes, say economists.

Banks moved quickly to cut home loan rates yesterday after the Reserve Bank dropped the official cash rate to 3.5 per cent.

Economists spoken to by the Herald said the dramatic 1.5 percentage point cut should put a cushion under falling house prices.

But with banks keeping tough home lending criteria and some 50,000 people expected to lose their jobs this year, they warned buying a property would remain out of many people's reach.

All the major banks dropped interest rates after yesterday's OCR announcement.

To read the full NZ Herald story click here

Posted: 30 Jan 2009

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