Is your NZ mortgage under attack? Good news, everyone: New Zealanders are saving like champions and house prices are shooting to the moon. Or at least, that’s what the surface-level optimism would have you believe—before a reality check smashes through the window like a poorly secured billboard in a Wellington gale.
BNZ’s chief economist Mike Jones is back with a fresh Property Pulse report, and the picture he paints is less moon landing, more emergency landing. Consumer confidence? Hanging on by a thread. NZ Mortgage relief? A theory yet to materialise in any meaningful way for Kiwi wallets. And KiwiSaver balances? Quietly being choked in the background.
Before you start casually browsing for that second investment property, maybe take a seat. Maybe pour a stiff drink. And maybe stop refreshing that Trade Me tab with beachfront homes you’re definitely not going to buy this year.
The tone out there? Let’s call it uneasy. Or as Mike puts it, “Not feeling it. That seems to be the vibe I get.” And it’s not just anecdotal. While we all love a good yarn over a flat white, the data backs it up: consumer sentiment numbers have rolled over like a sunburnt dad on a beanbag. They’ve gone backwards—again.
“We’re supposed to be in an economic recovery,” Mike points out, sounding like someone who’s just realised their life jacket is actually a seat cushion. “But those consumer confidence numbers have gone back down.”
How bad is it? Well, let’s talk about what’s making wallets shrink tighter than a boomer’s view of flexible working hours. The OCR might be falling, but no one seems to care.
“NZ Mortgage rates are down about 200 basis points from the peak if you look at the one- and two-year rates,” Mike explains. But here’s the twist: that’s not what people are paying.
“The actual rate people are paying is only a handful of basis points below the high.”
Translation? Most borrowers haven’t locked in the lower rates. They’re either floating, fixing short, or just too cautious to commit. That benefit everyone’s been promised? It’s postponed. You’ll feel it eventually—just not today. Or tomorrow.
“No one’s feeling it because the rate we’re actually paying as a nation hasn’t come down much.”
But don’t despair just yet. A silver lining peeks through.
“It is going to come. That cash flow benefit is coming.”
When it does, it’s not pocket change. BNZ estimates about $2 billion will be injected into household bank accounts over the next few quarters as people refinance at lower rates. That’s roughly half a percent of GDP. Real money. The kind that actually helps pay bills instead of just looking impressive on economic graphs.
Still, that’s later. Right now, what’s dragging down consumer confidence? Start with KiwiSaver. Remember that magical account you were told would grow while you slept? It’s currently doing its best impression of a slowly deflating airbed.
“Equity markets have fallen a long way,” Mike says, diplomatically. “Most people have a decent amount of equity exposure in their KiwiSaver balances.”
If you’ve peeked at your balance recently and gasped, you’re not alone. There’s a psychological hit that comes with watching your financial future shrink like a wool jersey in a hot wash.
“That might impact your spending behaviour—it’s what economists call a ‘wealth effect.'”
In plain English: when you feel poorer, you spend less. Especially when you combine that shrinking KiwiSaver with flat wages and persistent price rises on just about everything that isn’t fun.
You see it in the little things. Fewer online shopping sprees. Less enthusiasm for Friday drinks. And fewer bookings for that long weekend getaway that was meant to be a reset but now feels like financial self-sabotage.
And here’s where it gets thornier. That incoming NZ mortgage relief—when it finally lands—might be swallowed up by the psychological sting of lower investment balances and years of economic bruising.
So even when the money starts to flow again, will Kiwis actually loosen the purse strings?
“When you net all that together, it probably adds up to an environment where whatever your forecast for consumer spending was a week ago, you’re probably lowering it.”
Let’s talk Trump. Or more accurately, Trump’s economic tantrums. Round two of the global trade war has started with the subtlety of a fire alarm during naptime.
“It’s like a bad dream in reverse—you wake up, check the news, and then you get your nightmare,” Mike says.
We’re in a period of volatility where no one knows how the story ends. But we do know one thing: the impact will be negative. The question is how much.
“If you’re looking for silver linings, maybe New Zealand gets hit a bit less than others. But there will still be a negative impact on growth.”
That’s why the Reserve Bank is busy slashing rates like a disgruntled chef at a buffet. They’re not trying to make you rich—they’re trying to keep the economic heartbeat from flatlining.
And while we’re on the topic of pressure, what kind are Kiwi households under right now? Latte-cutting bad? Or sell-the-boat-and-a-child bad?
“We look at our own B&Z card data,” Mike says. “We’re definitely spending more than last year. But it’s the essentials—government charges, utilities, health, education.”
In other words, the bills are winning. The luxuries? Left behind. Travel, renovations, that shiny new barbecue you pretended was for ‘family bonding’—they’re all on pause.
“The question is when that NZ mortgage cash comes through, do people feel a bit better and start to splash out?”
The answer, as usual: we’ll see.
Here’s another fun oddity. Business confidence is soaring like it’s had three espressos and a tax cut. Consumer confidence, meanwhile, is curled up in the fetal position under a weighted blanket of economic despair.
“It’s the widest gap we’ve ever seen between business and consumer confidence,” Mike notes.
That’s not normal. And it probably won’t last.
“I think it’ll narrow. We just don’t know whether it’ll be businesses coming down or consumers coming up.”
It’s a bizarre paradox. Businesses think brighter skies are ahead. Consumers think a storm’s brewing. Somewhere between the two lies the truth—but the timing of that convergence? Unclear.
So what should a sane Kiwi with a NZ mortgage, KiwiSaver, and a dream of not retiring in a tent do right now?
“Don’t panic. Watch, wait, maybe worry a little—but don’t panic.”
That’s the mood for 2025. Quiet vigilance. Strategic patience. Keep a buffer, hold your nerve, and don’t make financial decisions based on headlines alone.
We’re in the middle of a global shock. No one’s got all the answers—not even the economists. But the smart ones? They’re watching closely, stacking the odds in their favour, and preparing to move when others freeze.
Stay aware of shifting rate trends. Track your fixed-term expiry. Understand the lag between policy announcements and real-world impact. That’s the space where wealth is built—not when everything’s clear, but when it’s blurry and confusing and everyone else is paralysed by noise.
The old rules don’t apply. In the past, economic downturns felt like clear signals to tighten belts and wait it out. But now? In an era of global shocks, algorithm-driven equity markets, and unpredictable fiscal swings, the signals are muddier.
We’re not in a boom, but we’re also not crashing. We’re floating—awkwardly—between cautious optimism and nagging dread. And that’s exactly where decisive, informed moves can create generational wealth.
So if you’ve got KiwiSaver, track your allocation. If it’s heavy on equities and global markets are volatile, brace for turbulence. But also remember: volatility is where the long-term returns live.
If you’ve got property, don’t just obsess over valuation. Look at your debt structure. Are you floating when you could lock in value? Are you overexposed in one suburb? Could you leverage smarter, not harder?
And if you’re holding cash, remember: it’s not just about having a buffer. It’s about what you do when opportunity knocks and everyone else is too scared to answer.
This next season won’t reward the loudest voice or the boldest tweet. It will reward those who move calmly, with data, and a deep understanding of timing.
Mike Jones and BNZ aren’t sugarcoating it. They’re telling you straight: pressure is real, recovery is slow, and the next wave of growth will only lift those already swimming.
Don’t panic. Prepare.
And finally, if you haven’t already, subscribe to the fastest growing property and investment channel in the country. Not because it’s cool. Because it’s smart. And because while everyone else is still waiting for clarity, you’ll already be making moves.
Game on.
