How will COVID-19 and the RBNZ and Government response impact you?


The RBNZ took aggressive action, with an early review of the Official Cash Rate (OCR), making a 75bps cut, to a record low of 0.25%. The cash rate had already been at a low at 1% where it had remained for a number of months. The cut has also been confirmed to remain at 0.25% for at least the next 12 months with the RBNZ saying the economic outlook has “deteriorated significantly”.


Finance Minster Grant Robertson announced a 12.1 billion support package for the NZ economy, equivalent to 4% of GDP, which is high by global standard.

With significant wage subsidies, sick leave provisions, tax changes, benefit increases and a boost to winter heating payments this was a massive announcement which shows the severity of the situation facing the economy.  

So what does this mean for you?


The travel restrictions will decimate tourism numbers to New Zealand with some commentators talking the losses up to be 10 billion dollars.

Demand for tourism related goods and services will be down significantly and with the massive upheaval to airlines and global markets it's likely even post-virus the demand will be slow to come back online.

The tourism sector in Queenstown and Central Otago has already begun to feel the effect, with less people choosing to travel. AirBnB owners have been hit hard, with bookings dropping dramatically. This is especially difficult for those who are relying on a steady AirBnB income to pay their household expenses or mortgage payments. 

Many short term rental properties have headed back to the longer term pool with prices for rentals being offered dropping almost overnight due to this impact.

Staff in the tourism sector are also likely to be hardest hit, meaning some staff are left with reduced hours or job losses. This flows on to rental and investment properties, with many seasonal staff choosing to go home or to other parts of the country - therefore leaving rental properties untenanted and their owners without rental income. Job losses in some sectors, such as tourism or forestry, could also impact home owners ability to pay back their mortgage.

The government support package will offset some of these issues but definitely will not alleviate all the challenges faced. The lower interest rates will help at the margins especially for those who have the ability to move to lower rates.

People should be speaking with their mortgage advisers, accountants and other professionals ASAP to take stock of their options.


Banks have already started to cut mortgage rates and interest rates, with floating mortgage rates already falling. However, if you have a fixed mortgage, you might not see an immediate effect. The 5 years fixed rate dropped to 3.89% last week prior to this announcement so watch this space.

While rates are already at a record low, they will likely fall lower and remain low for a good period of time. This is good news to many who are wanting to get into the property market, however the challenge for banks will be liquidity. Interest rates have also taken a tumble, and banks need deposits (especially domestic deposits) in order to continue lending.  

Those looking to use KiwiSaver to buy their first home should contact their provider or a financial adviser to discuss their options as the recent drop in many peoples KiwiSaver funds could have an impact on their deposit or pre-approved finance.

If you are looking to buy a home or re-fix your mortgage, working with your professional advisors will be an important part of the process. It’s best to start discussions early, so even if a house purchase is on the horizon - get in touch and we can help.


There will be numerous people hurting in the months to come and we need to support them in any way we can. Try and shop local and support local small businesses such as food outlets, cafes and retail stores. Being a tourist in your own country can also be a great way to, not only still get a bit of a holiday, but to also help support New Zealand tourism operators. 

Take a moment to look out for your friends, family and neighbours - especially anyone who is elderly or may need assistance.