The Reserve Bank is tipped to keep its interest-driving official cash rate (OCR) at 3.5% at its next review, on Thursday.
Average national house prices are now 15.8% above the previous market peak of late-2007 - they have slowed - but the export receipt-earning dairy sector has seen global prices slashed 42% on a year ago - potentially more than $5 billion of payouts sluiced out of the economy.
ANZ chief economist Cameron Bagrie said inflation during the second half of 2014 was projected to be closer to the bottom of the Reserve Bank's policy band, 1% to 3%, than the 2% target point.
Westpac chief economist Dominick Stephens said given the forthcoming general election and expectations of most economists, the Reserve Bank would keep a ''pause'' on the OCR in its Thursday monetary policy statement.
He labelled it ''a dead rubber... the OCR will be left unchanged at 3.5%, end of story''.
Reserve Bank governor Graeme Wheeler has steadily raised the OCR since March, from its record low 2.5%, to 3.5%, in order to offset rising house prices which have largely been in Auckland and Christchurch, but are evident elsewhere in the country.
While the Reserve Bank's introduction of its loan-to-value ratio restrictions on banks, brought in last October, saw the number of house sales decline heavily in most areas, prices had remained stubbornly high.
Mr Stephens said while economic growth, inflation and dairy prices were all lower than expected, net immigration had ''snowballed unexpectedly'' fixed mortgage rates were falling and the exchange rate had declined.
''It is not entirely clear which of these developments dominates, so far as the medium-term inflation outlook is concerned,'' he said.
ASB chief economist Nick Tuffley expected the OCR to remain on hold until early 2015, with dairying's decline and the New Zealand dollar having ''barely responded'' to the substantial 42% year-to-date price fall.
''House prices appear well contained, though net migration inflows have run ahead of Reserve Bank assumptions,'' Mr Tuffley said.
Government agency Quotable Value noted last week the growth rate of New Zealand residential property values had been slowing and the trend had continued during August.
While not expecting the Reserve Bank's growth and inflation forecasts to change much, Mr Tuffley said he expected the Reserve Bank to forecast lower interest rates than it did in June.
ANZ's Mr Bagrie, having noted the dairying price downturn represented $5.1 billion or 2.2% of gross domestic product, said the economy was more ''symmetrical'' than three months ago, with positive and negative risks.
''It's not just the likes of a low dairy payout: the New Zealand dollar is lagging, the global scene is far more wobbly and some geopolitical aspects, [such as the] Russian sanctions, have had clear implications for soft commodities,'' he said.
