The Reserve Bank could reach deep into its economic bag of tricks in 2013 to cool the country's overheating housing markets and soaring demand for home loans.

Official figures released last month show the New Zealand economy expanded at a pace of 0.2 per cent in the September quarter, even as home prices in Auckland continued to soar.

Slowing growth of the economy was likely to prevent the central bank from using traditional measures, such as lifting the official cash rate or OCR from its current historic low of 2.5 per cent.

ASB pushed out its bets on when the OCR was likely to rise from September to the final quarter.

That tips policy action in favour of non-traditional macro-prudential tools such as lifting the deposit level homebuyers would need to qualify for a mortgage and capping the amount of debt people can take on relative to income levels.

ASB chief economist Nick Tuffley saw potential for Reserve Bank governor Graeme Wheeler to use macro-prudential methods to offset soaring property prices and growing demand for credit.

"The hottest parts of the inflation outlook, construction and housing, are showing more tangible signs of heating up," Tuffley said.

"The RBNZ is now placing more emphasis on these factors, and we expect they will become an increasingly bigger part of the RBNZ's policy decisions (this) year."

ASB expected the New Zealand dollar to continue gaining in value in the first half of the year peaking at US84c in June, but Tuffley believed the RBNZ already factored that into the current OCR level.

The pace of economic activity was expected to pick up in the year ahead thanks to the Canterbury earthquake rebuild finally getting under way.

That should feed into support industries such as transport, wholesaling, consumer spending, manufacturing and professional services.

However, further signs of that progress are unlikely to be seen in this week's building consents data.

ASB estimates the number of building permits issued in November fell 1.5 per cent compared to October due to slow construction activity in Christchurch.

- © Fairfax NZ News

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