Bernard Hickey talked to Nadine Chalmers-Ross on TV One's Breakfast program earlier today.
They discussed the roaring Auckland housing market and how the Reserve Bank is viewing what is going on.
Many first-home buyers have never experienced anything but very low interest rates, nor any period when house price fall.
This lack of perspective is seeing some people gear up dangerously, some with risky 100% LVR loans.
Although the situation is only a problem in Auckland at present, history has shown that such bubbles spread out from Auckland once they take hold.
The usual dampener is for the Reserve Bank to raise interest rates, but such a move will hurt already struggling businesses and exporters and push the exchange rate even higher.
Alternative dampeners are being readied by the Reserve Bank including LVR controls, but the regulator does not think now is the right time to bring them in.
However, Bernard suggests the situation is rapidly spiraling and both the RBNZ and the Government need to step in very soon to calm things in the Auckland property markets.