ANZ's economists pick house prices to remain flat in the first half of this year and then rise by 2% in the second half

Weren't ANZ predicting 7% house price increase a few months back? So what would they know. 

You can call it a recovery when house prices increase faster than inflation. At the moment they are still going backwards in real terms. 

Are you saying the bank economists have no professional integrity???

re ... "There are many reasons why staying flat for five years isn’t good for the economy,"

Care to explain why you believe that?

I could quickly list many reasons why it would be exceptionally good for the economy, both at this time and for the next generation or two.

While we're in a per capita recession? Unlikely.

It'd take a year and more to flow through.

What typically happens when central banks start bringing rates down is that consumers (after expelling a collective sigh of relief) tend to save the extra, or pay down debt, for at least that long before sufficient confidence returns for them to start spending the extra disposable income. Those who have term deposits aren't tempted to spend up big either and tend to roll-over the TDs at lower rates (while missing the share market rallies).

Of course, that depends on how the RBNZ does it.

Massive cuts to restart the economy have an earlier effect inflationary effect to regular small ones where consumers and businesses really aren't sure when, or how big, the next cut will be. (The RBNZ, through their own foolishness, may be forced into the former. What they should be doing is the latter - and they should be doing OCR now! While saying they'll evaluate before there are any more (while we know they'll be coming with near certain regularity.))

I should add that now supply chains are largely (but not completely) back to normal - spending on imports that are not subject to NZ businesses' greed instincts and where product substitutions are abundant (i.e. there is real competition) - won't be inflationary. I.e. let them spend. 

After tax, term deposits are losing money in real terms.

Fair point. 

The MDRS was a poor way to implement density increases as it was breaking the council's social contract with its ratepayers in many communities, and that is why it is being rejected. And the council's infrastructure in many areas cannot cope with any increase in density so areas designated were largely a 'paper' exercise that wouldn't result in more houses built anyway, at least without great additional cost.

Plus many of the housing types are not what people want for their lifestyle choice if given the choice, but it is all they can afford, which is coming more and more at the expense of every other thing of importance, from saving for retirement, education, health costs, having kids etc.  

And of course, unless it is tied in with less restrictive land use policies both up and out, then it cannot in theory, and certainly as not in practice, make housing more affordable on a like-for-like basis. And until it does that then there is the continual reductiveness trend where we will all be in very expensive Hong Kong caged housing.

Present Coalition policies are far more suited to increasing supply, just on land use theory alone, although they do still need some work.

But the biggest impediment to any policy is you need the trinity of correctly designed policy, correct methodology, and correct implementation all to happen, and in many cases, it has to all be 100% correct, otherwise, you get a result that is by a multiple far less, even to the point of zero success. Getting 90% of the way there will not get you anywhere near 90% of the benefit.

You cannot successfully leap a chasm in two steps. 

So we are waiting for a non-existing surge.?

The maths of course which you are advocating for is higher house prices. Is this because of vested interest and/or ideology?