"That New Zealand's housing market is stuck in clearly over-valued territory is a bit of a worry, especially in that it might mostly be a consequence of the very low interest rate settings in place at the moment."
To ignore the probable imbalance would be irresponsible, Mr Ebert said.
There was only one way to test the over valuation and that was for the Reserve Bank to remove the degree of official cash rate stimulus now in place.
"Yet, the bank probably feels averse to doing so. Not only because it might actually cause a proper correction in home prices, back to sounder economic footings, but also because of the wider economic distress any OCR lifts might cause."
There were ever-present risks from abroad that might make any domestic rate hikes appear ill-timed and foolish, he said.
Having a 2.5% OCR was an uncomfortable position for the Reserve Bank to have put itself in but a re-bubbling local housing market could force the central bank's hand before any supposedly inevitable collapse in the global economy, Mr Ebert said.
The 2004-07 house price bubble that had now been well acknowledged, never really popped, he said.
His impressions came from studying the trend in real (CPI-deflated) house prices, the valuation of New Zealand's housing stock in relation to total household disposable income, nominal house prices compared to rents and house prices in relation to weekly earnings.
They all painted a picture of New Zealand's housing market less over-valued than it was but still "pretty pricey" and threatening to increase its degree of over-valuation, he said.
"These macro-economic metrics were the same ones we consulted in late 2007 early 2008 when we came to the conclusion the market was around 30% above fundamentals."
While that was not the same as forecasting a 30% price drop, it did suggest that New Zealand housing prices were going to struggle in terms of either coming off or marking time while fundamentals such as incomes and rents caught up, Mr Ebert said.
