The Reserve Bank Governor's warning against a renewed "borrow and spend" habit is unlikely to dampen New Zealanders' enthusiasm for property, according to the Real Estate Institute.
Governor Allan Bollard says early signs of a recovery from the recession have emerged, bringing with it a risk that households will resume "borrow and spend" habits before they have paid down some of their existing debt.
"This could be triggered by renewed moderate house price inflation, and needs to be avoided," he told a business audience on Tuesday.
The Reserve Bank wants people to save money in order to reduce the country's dependence on high levels of foreign debt.
Real Estate Institute president Mike Elford says it is clear the bank has the country's interests at heart, but people will still consider property investment as a safe bet. New Zealanders want to own their own property, he says, and many measure their wealth by the investment property they own.
Mr Elford says in the past 35 years, New Zealanders have seen property outperform almost all other types of investments.
Westpac says the recent upturn in property prices is unlikely to mark a return to strong price gains.
ANZ National Bank chief economist Cameron Bagrie says the Reserve Bank wants people to spend, but to do so responsibly.
He told Morning Report the public needs to accept that the economic model of the 1990s is being replaced by one that revolves around exports and earnings' growth.