Whilst I would not want to overplay the significance of housing and construction in our policy decisions - stronger inflation pressures have been evident in many other parts of the domestic economy as well - we have clearly had to take the strong housing sector into account when determining policy settings.
The recent period of strength in the residential property market is hardly unprecedented in New Zealand. The early 1970s, the early and late 1980s, and the mid 1990s were also periods marked by intense activity in the housing market and strong house price inflation. There were some unique features to each of those cycles, but also some common drivers.