Bollard gives a bit but signals warning on house prices

On the other side of the ledger, he signalled definite concerns about the housing market, which will no doubt be stimulated further by today’s cut.

In particular, Bollard notes that housing inflation is already "quite strong" and that "some investors have unrealistic expectations about this."

Stephen Toplis at Bank of New Zealand says annual housing inflation at 14.1%, as was shown in the Real Estate Institute’s latest report, "is clearly outside the Reserve Bank’s comfort zone. The apparent beginnings, I would stress beginnings, of a bubble in the housing sector would bother the bank."

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