Westpac is picking the current surge in immigration to reverse in the second half of this decade, with an accompanying fall in house prices.
In Westpac's latest Home Truths newsletter, the bank's chief economist Dominick Stephens said the housing market was expected to stage a brief resurgence this year, "before a more pervasive downturn ensues."
"For some time the Westpac economics team has been forecasting a modest resurgence of house price inflation this year, before the market turns more decisively negative later next year," Stephens said
"Despite our near term bullishness, we anticipate a period of falling house prices later in the decade.
"Our rationale for such a multifaceted forecast is net migration.
"In the short run, net migration is set to hit an all time high of 50,000 people per annum.
"Our research indicates that net migration usually plays only a relatively small role in determining house prices.
"But sheer weight of numbers means that even that small role will translate into a reasonable boost to house prices over the year ahead.
"But the current migration boom is likely to prove just as ephemeral as New Zealand's past experiences with net migration.
"We are forecasting quite a reversal in net migration over the second half of this decade as the recovering Australian economy attracts Kiwis back across the Tasman.
"Net migration can be expected to fall further when the Canterbury rebuild winds down.
"Slower population growth will surely translate into a slower housing market in years to come."
Over the same period interest rates were expected to rise, putting further downward pressure on house prices, he said.