Andrew Nicholl

And he did say that at the moment, the bank's margins on interest rates were about 20 basis points less than what is kind of normal, and that he was expecting rates to kind of creep up.

Not that full 20 basis points, but maybe 10 basis points.

So if you go back over the last 10 years and you look at the difference between the one year rate and the OCR, there's about a 2.25% difference between them.

So if the OCR was 3% and you add on 2.25, you end up at 5.25%.

So because the OCR is 2.25% and you add 2.25 to that, it's roughly about 4.5% at the moment.

So if the OCR does get to kind of 3% by early next year, add 2.25% to that, you're at 5.25.

That's our best guess of where it's going.

And if we assume that at that stage, OK, well, the wholesale rates have already baked in some of those increases, that's probably going to land a bit more perfectly to that.

It might not either.

But even if you wanted to be really safe, you might do your modelling at 5.5%.

But again, when I say safe, I mean best guess.

There's no such thing as safe when it comes to forecasting because everyone's going to be wrong.

I think this year, and I've said this to developers, investors, kind of everyone at the moment, I kind of think it's going to be pretty lackluster.

There's still room for opportunity, don't get me wrong.

And certainly it's going to be in those areas where there are pockets of opportunity rather than just a nationwide thing.

But the interesting thing is they are forecasting stronger growth in 2027.

So starting from kind of mid next year to the year after, the Reserve Bank are projecting growth of 5.7%.

Now, again, that's not going to be distributed evenly either.

There might be areas that are going backwards.

There might be areas that are going up by more than that.