The rate of growth has started to slow throughout the rest of the country.
Property research firm CoreLogic described the news as "pretty much one-way traffic" for the property market.
"Competition amongst the banks is already strong, 'rate wars' are frequent, and a lower-for-longer official cash rate also bodes well for mortgage rates over the next 1-2 years at least," said Kelvin Davidson, Senior Property Economist.
"In this environment, borrowers are sitting pretty. Property sales volumes and prices should hold up relatively well (albeit not booming), especially since the prospect of capital gains tax has now been taken off the table."
However he warned people needed to be mindful of "the probable requirement that banks hold more capital on their balance sheets in future."
"It seems likely that the proposal will be introduced in some shape or form, and could push up mortgage rates by as much as 1 percentage point," he said.
"For now, however, today's OCR cut means it's still business as usual for the residential property market."
OneRoof.co.nz editor Owen Vaughan says: "Rewind to last year, and the mood was that rates would go up. The cut is good news for first home-buyers and those who are in a position to renegotiate their mortgage.
"And with CGT now off the table, the Reserve's move may spark more activity in the investor market, which had been subdued."
Valocity director of valuation James Wilson said the OCR announcement may drive increased interest rate competition among the retail bank, potentially fuelling some market activity among certain buyer groups.
"However, given the indication of downward pressure during the last announcement, some retail banks had already moved to price lower rates, so the impact may already have been priced in.
"Potential capital adequacy ratios and the pricing of offshore funding may prevent the full cut being passed on.
"In terms of the housing market, there are other headwinds at play at the moment which are subduing values in the main urban centres, culminating in a lack of 'heat' in the market, this 'wait and see' approach is expected to continue for some time."
The Reserve Bank would not be keen to see house prices soaring again - but has weighted the balance of risk towards the other end of the economy.
Previously it has used its regulator powers to introduce restrictions on bank lending (LVRs) to cool the market.
As part of its financial stability brief the RBNZ monitors New Zealand's private debt levels closely and has regularly cited them as cause for concern.
Teh rate of growth in mortgage debt has slowed in the past two years but remains at relatively high levels by global standards.
In its decision today the Reserve Bank cited concerns about slowing global growth and the domestic economy.
It noted that inflation was still subdued and that despite low unemployment there was some slack in the job market.
"The Monetary Policy Committee decided a lower OCR is necessary to support the outlook for employment and inflation consistent with its policy remit," the newly minted committee - which includes three external members - said in the statement.
It said the lower OCR provided a more balanced outlook for interest rates, without indicating whether further cuts were needed.
