Time to follow Aussie's lead

39-47 Union St. Artists/Impression

I hear the Reserve Bank of Australia is likely to lower its official cash rate (OCR) again. It lowered its OCR to 2.25 per cent on March 3, and the rate could be lowered to 2 per cent next week.

Australia's inflation target is similar to New Zealand's -- ours is set at between 1 and 3 per cent, and Australia's is between 2 and 3 per cent. Today, our annual inflation is sitting below 1 per cent -- a possible sign of deflation.

So when will Reserve Bank governor Graeme Wheeler follow Australia's lead and lower our interest rates?

Meanwhile, with our OCR of 3.5 per cent, most banks here offer a "floating" rate of about 6.75 per cent -- a 3.25 per cent difference.

No surprise then when banks such as the ANZ announce a quarterly profit of $425 million, as it did for the three months to December 31, 2014. Not only should our OCR come down, but banks should consider reducing their floating rates.

After all, their risk is reduced when they loan 80 per cent of a property's value due to the Reserve Bank's loan-to-value restriction.

Heading to Hamilton

Some people, tired of looking for a place to live in Auckland, appear to be high-tailing it to Hamilton.

Figures from the Real Estate Institute reveal that 308 houses were sold there in February, up 67 per cent when compared to the same month last year.

The institute says median prices for homes in Hamilton are about $352,000. Auckland City's median is $753,000, and the North Shore is $875,000. QV.co.nz says the average value of a New Zealand home is $502,411.

Looking across New Zealand, 6898 houses sold in February, up 12.6 per cent on February last year -- the highest February sales since 2007.

Home building

Developers in Auckland are busy with plenty of building work now underway across the city.

Stage two of the Hobsonville Point development is now being marketed, 60 per cent of the apartments at St James in Queen St have sold, there's the Alexandra Park apartments and the Union Green development, to name a few.

However, new dwelling consents dipped in February by 0.6 per cent when compared to February 2014. Not a good sign given the shortage of affordable housing in Auckland.

Stats NZ says the trend for new dwellings has more than doubled since March 2011, but is now showing signs of decreasing after increasing for almost four years.

Hopefully this is just a blip.