ANZ paints sombre picture of house prices

The bank gives its views each month using a growing range of 10 indicators which include the obvious, such as interest rates, affordability and migration through to some of the less obvious such as liquidity and globalisation.

None of its 10 gauges in the latest report are absolutely positive for house prices, however two are slightly positive. They are the supply/demand balance and consents and house sales.

ANZ says the supply demand equation is out of balance with far more houses on the market than demand from buyers.

Consents and house sales are considered key factors for the market. Consents are at low levels and the number of houses being built is insufficient to satisfy demand while the number of houses being sold each month is at very low levels.

"A large supply of existing dwellings on the market, ongoing household de-leveraging, low income growth and a moderation in net inward migration are constraining housing market activity.

"However, residential consent issuance remains at a low level relative to core demand which is leading to some tension in the market."