BNZ chief economist Tony Alexander has left no doubt about what he thinks will happen to Auckland house prices in his latest BNZ Weekly Overview newsletter.

In it he reprises a piece he wrote in 2012 titled 19 Reasons Why Auckland House Prices Will Keep Rising.

His views on the direction they are headed in have not changed in the interim.

"Auckland started with a shortage in 2008, the shortage got a lot worse as NZ house construction fell back to levels of the 1960s in 2011, and the shortage continues to get worse as the number of consents issued in the past 12 months in Auckland has not even reached the 23 year annual average which produced the shortage in the first place," he wrote.

"Note that in 2012 the Auckland Council estimated that 13,000 dwellings needed to be built each year.

"Two years down the track and the annual total in the year to September for Auckland was 7,320 and a year ago that total was 5,595. Prices keep rising."

Alexander also pointed out that just because land on the outskirts of the city might be freed up for housing, it could be many years before anything was actually built on it.

"For a land owner, as long as they can service the rates, the easiest hassle-free thing to do if one does not need the land sale money, is simply hold it and wait for population pressures to drive the price higher. History shows this to be a fairly good investment strategy," he said.

He also pointed out that he thought it was too early for the Reserve Bank to start easing back on the loan-to-valuation ratio mortgage lending restrictions.

"Some people got quite excited early this week thinking that the Reserve Bank on Wednesday might announce an easing in the loan to valuation restrictions," he said.

"I gave a radio interview listing a number of reasons why it is much, much too soon to expect such an easing and the Reserve Bank eventually stated on Wednesday: '...there remains a risk of a resurgence in in house price inflation, particularly in light of strong immigration flows.' "

Alexander said it was not inconceivable that the LVR restrictions would be eased down the track.

"But the timing is too soon and were I running the RBNZ I would want to see much more evidence of a sustained suppression of house price inflation before backing away from this new tool," he said.

He also gave his thoughts on what to go for if people want to take out a mortgage.

"Were I borrowing at the moment I would take my time and see who is offering not the best standard rates, but the best discounted rates.

"Competition between the lenders is hotting up and I would feel that the power is in my hands.

"I would pick and choose and if I could get a sub-6% rate for five years I would take the low rate and the great certainty that it offers."

This Overview was one of the best overviews on the Auckland housing market I have read in a while.

If you would like to read it in its entirety, click on this link.

----------------------------------------------------------------------------------------------------------------------------------------

Our new free Property email newsletter brings you all the stories about residential and commercial property and the forces that move these huge markets. Sign up here.

To subscribe to our Property newsletter, enter your email address here. It's free.

----------------------------------------------------------------------------------------------------------------------------------------