This reflects a combination of falling export dairy prices, feeble inflationary pressures and a deterioration of business and consumer confidence.
Rothbury Mortgage adviser Josh Martin said the predicted cuts would present an opportunity for first-home buyers to get in to the market. "A lower cost of borrowing is making mortgages more affordable across the country. This helps to offset the increase in property prices which is good news for first-home buyers who otherwise might have been shut out."
However, he did not see any immediate change fixed rates.
"Lenders have already factored in a further cut to the OCR in their previous fixed rate announcements, the floating rate, however, will drop if the OCR does," he said.
If the rate continued to drop later in the year as predicted then fixed term interest rates might begin to follow, he said.
He also said that when loan applications were considered for approval, they were calculated at an interest rate of about 7.5 for long-term safeguarding, despite whatever the current interest rate was.
Tauranga Harcourts general manager Nigel Martin said the possible interest rate cuts would help first-home buyers. "It's going to allow people to borrow more money if interest rates are lower and that'll help people get onto the property ladder." Mr Martin said.
Ross Stanway, chief executive of Realty Services, which operates Eves and Bayleys Real Estate, said it would bring more people into the market.
Ideally, to keep up with demand, it would also spur on more home owners who had been considering selling to make the move when they saw a busy buyer's market.
However, mortgage broker Chris Rapson, of Rapson Loans and Finance, said the impact would not be immediate as floating interest rates would take a while to follow suit and more than half of New Zealanders were on fixed rates.
Once interest rates responded to the drop, it would make life easier for people to pay off their mortgages and allow people to borrow more.
It was hard to say whether it would be worth someone paying the penalties to cancel their fixed interest rates to sign up at a possibly lower rate, he said.
"If they have a little longer to go on their current rate, it's not the end of the world. With a bit of luck when they next come up for renewal they'll be able to refix at a slightly lower rate."
Craigs Investment Partners head of research Mark Lister said overall it was good news for Tauranga. The region would benefit from lowered interest rates and a lower New Zealand dollar without also suffering from the falling dairy industry, which was not big in the area, he said.
"All the power is with the borrower at the moment ... If I was a borrower I would sit and bide my time ..."
