The New Zealand housing market is at the whim of multiple cross currents, with conditions quiet in Auckland but pressure building in other key markets. According to the latest ASB review, the national market can expect increased house price inflation in 2020, with falling interest rates and renewed population growth likely to increase the heat. Westpac economists offered a similar view in their latest assessment, with national prices rising and Auckland likely to return to flat growth after a year out in the cold.

On an annual basis ending June, national New Zealand house price growth is forecast at 0.9% in 2019, with Auckland forecast at -3.1% and Christchurch down 0.5%. While Wellington is likely to have a bumper year with 6.6% growth, and other regions are forecast at 2.7% growth, the overall property market will remain subdued at best. According to ASB, however, we can expect growth to return in 2020, with national prices forecast at 5.5% growth, Auckland at 0.0%, Christchurch at 2.0%, Wellington at 9.3%, and other regions at 9.3%.

As multiple factors align and add heat to the market, there is already a concern that their impact may be short-lived. Along with the recent sharp fall in interest rates, New Zealand is seeing strong population growth and fairly healthy labour income growth. According to ASB senior economist Mike Jones, these conditions will "jump-start the Auckland housing market and add a little more heat to simmering regional markets". However, while low interest rates will fuel housing inflation, "the turning NZ economic cycle, policy-related handbrakes, and a ramp up in housing supply will all act to limit the extent of the upturn in our view."

As the nation's biggest market and best real estate indicator, Auckland will only return to neutral territory next year, and even this may be short-lived. Both in Auckland and nationwide, Jones expects the price cycle "to top out as new housing supply coming on-stream gradually reduces the housing shortage". This will have a huge impact on market pressure, with the increased housing supply promised for some time likely to put a dent in any upward movement.

Economists at Westpac are pretty much in agreement with the ASB assessment, although they're even more buoyant with a forecast of 7% national growth in 2020. At least Westpac's Chief Economist Dominick Stephens is aware of his optimism, however, saying "We have encountered a great deal of scepticism about that forecast - most other economists expect the current low rate of house price inflation to persist."

What happens over the next few months will tell us a lot about the years ahead, especially as stock levels start to rise in such a low interest environment. Days to sell and inventory are both above average in Auckland, with the number of houses on the market being the one significant difference between Auckland and Wellington. While cross currents will continue to affect different cities and regions in unique ways, like always, national numbers will remain subdued while Auckland catches its breath.