Two more rate cuts to come: Reserve Bank to the rescue as recovery stalls
ANZ is now forecasting the next two 25bp cuts to come in October and November (previously it had November and February).
The move could push mortgage rates lower, said property analysts Cotality.
However, the general gloomy outlook for the economy meant there was not likely to be any sudden outlook for the housing market.
'If anything, the possibility of more falls in mortgage rates than previous thought could lift activity and house prices a bit. But those rate changes may be fairly minor,' said Cotality Chief Property Economist Kelvin Davidson.
'And in the meantime, as the RBNZ has indicated, the economic and labour market outlook is still disappointing, which will tend to weigh on housing, as it's already doing.'
The RBNZ painted a downbeat picture of the economy in its monetary policy statement.
New Zealand's economic recovery stalled in the second quarter of this year, the RBNZ said.
'Spending by households and businesses has been constrained by global economic policy uncertainty, falling employment, higher prices for some essentials, and declining house prices.'
In an unusual split decision, the monetary policy committee debated three policy options: keeping the OCR on hold at 3.25%; cutting the OCR by 25 basis points to 3%; or cutting by 50 basis points to 2.75%.
Only the latter two options were put to the vote.
The Committee voted on the options of either reducing the OCR by 25 basis points or reducing the OCR by 50 basis points.
By a majority of four votes to two, the Committee agreed to decrease the OCR by 25 basis points to 3%.
But the range of options discussed suggests a wide divergence of opinions on the committee, with at least one member still concerned about inflation risk.
The release moved markets with the Kiwi dollar falling by half a US cent.
On the interest rate markets, the two-year swap rate fell by 15 basis points to 2.97% while 10 year bond yields dropped by nine basis points to 4.41%.
The NZX50 stock market also rallied on the decision.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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