It will add to the Reserve Bank's nervousness. It raises the risk that the housing market doesn't slow.

The New Zealand dollar remains a downward-trending currency. The downward direction is implied by greater certainty about a slow economy.

These are not the conditions that cause a big fall in house prices. I think it will fizzle out. Gradually the interest rate impost will hit people's pockets. Gradually the new houses and apartments still being built will affect the supply/demand balance.

In other words, another RBNZ tightening cannot be dismissed yet. It is spending, not production, that is the target issue at present. And the factor that will determine whether another tightening is required.

The long-awaited New Zealand dollar decline is coming. The huge investor inflows over 2005 will see to that.

Investors seem to be facing 2006 in a similar frame of mind to last year, albeit [they are] a bit more cautious.