So why are we seeing runaway house price inflation in Auckland?
One explanation sometimes proffered is that this is just another instance of the scary global phenomenon of abnormally low interest rates inflating asset prices.
But the same low mortgage rates are available across the country.
A more common explanation offered is migration.
The city's population is growing particularly quickly. The net inflow of migrants added 56,000 to New Zealand's population and Auckland's share was disproportionate: 51 per cent of all migrants who stated an address on their arrival card were moving to the Auckland region, while of those who stated an address on their departure card, 42 per cent were migrating from Auckland, Statistics NZ tells us.
That is on top of internal migration, encouraged by the fact that half of the national employment growth in the latest March year occurred in Auckland, and natural increase (births minus deaths).
Notoriously, growth in the housing stock has not kept pace and the number of people per dwelling has been rising.
Intensification is inevitable. An unholy alliance of nimbyism and jobsworth risk aversion by officials can only obstruct that for so long.
But an imbalance in the demand and supply of housing is not the same as an imbalance between the supply and demand sides of the market for dwellings.
The former is about people needing a roof over their heads; the latter is about houses and apartments for sale on the one hand, and people with the wherewithal to pay for them on the other. And that, as Aucklanders are painfully aware, is a very different matter.
But perhaps another demographic factor is relevant, as Westpac's chief economist Dominick Stephens argues.
It is the statisticians' forecast that Auckland's population will be half as large again
within 30 years.
A city of 2.2 million will not consist of 40 Invercargills side by side - endless suburbs of standalone houses with no one's back yard overlooked. Life is too short to spend that much of it commuting.
Intensification is inevitable. An unholy alliance of nimbyism and jobsworth risk aversion by officials can only obstruct that for so long.
And the prices people are paying in the more central parts of the city embody that expectation.
Stephens puts it more carefully, of course: "The perceived value of the land in Auckland is rising because housing supply regulations are being liberalised." Adding three-quarters of a million people to Auckland's population over the next 30 years will create unprecedented demand for dwellings, within striking distance of major centres of employment, especially near the central business district.
"At present, much of the relevant area is occupied by single dwellings on relatively large plots of land. In the past, zoning restrictions and building regulations made it difficult or expensive to intensify the use of that land. But recent regulatory changes are opening an easier and cheaper path to intensification. And consequently the value of the land has gone up," he says.
"So if you want to buy a typical land plus house package today you have to outbid a developer or speculator who believes rightly or wrongly that the same land may accommodate multiple families in the future." A heat map of where house (really land) price inflation is most intense supports the idea that people have come to expect intensification and are land banking, Stephens says.
Land banking, in other words, is not just hoarding bare land.
The Reserve Bank is struck by evidence from an ANZ survey late last year which found property investors in Auckland expect house prices to rise by an average of 12 per cent a year over the next five years.
At the same time rental yields have fallen to little more than 3 per cent; that is clearly not what is driving the prices investors are prepared to pay.
The bank says a third of new mortgage lending nationwide - and about 40 per cent in Auckland - is to property investors, half of whom have a deposit of less than 30 per cent.
New rules it announced on Wednesday will require all investors (ie. non-owner-occupiers) to have a 30 per cent deposit.
It will limit the risk to the banks' balance sheets in the event of a severe market crash, which grows more likely the longer double-digit house price inflation expectations are driving buyer behaviour.
That financial stability objective is central to this policy. But the Reserve Bank also hopes shutting out some buyers will rein in house price growth. Its modelling suggests an impact of 2 to 4 percentage points - not large in the context of 19 per cent house-price inflation in the city.
We can expect acrid fumes of injured innocence to come wafting off landlords who have, after all, only responded rationally to demographic and regulatory signals.
No doubt there will be claims this will push up rents. Because landlords have only held back from raising rents to the level the (taxpayer-subsidised) market will bear out of the goodness of their hearts.
Yeah, as they say, right.
Read Westpac's Home Truths report here:
