The housing market is warming up, especially in Auckland.
Is this the start of another economically debilitating and socially destructive boom, like that of the mid-2000s?
The pick-up in housing market turnover is from a depressed base while the rise in prices, so far modest, is from a very high base relative to incomes.
The last housing market boom saw household debt build up to onerous levels and, since it was very largely funded by imported money, has left the country up to its neck in debt to the rest of the world.
This will weigh on the economy for years.
A lot of households have got the message that their financial boat is lying too low in the water for comfort and vigorous bailing out is required. It is no fun for them, or for businesses chasing the consumer's discretionary dollar.
The other legacy of the boom is a deterioration in housing affordability.
Traditional metrics are still very stretched by historical standards.
The Productivity Commission, in its recent report on housing affordability, says that during the 1980s house prices fluctuated between two and three times annual disposable household income.
Over the 1990s the multiple rose to more than three times, before climbing sharply to about 5.5 times income in 2007. Since then it has eased back to just under five times, but remains well above the long-term average.
Reserve Bank data on the ratio of household debt to income tells a similar story.
Household debt, the vast majority of which is mortgages, was around 100 per cent of disposable income at the start of the millennium. It climbed to 154 per cent by mid-2008, and had come back only slightly to 147 per cent by the middle of last year.
The commission points out, however, that affordability measures which factor in borrowing costs are closer to long-term averages.
By the peak in 2008 it required 14.3 per cent of the average household's disposable income to pay the interest on its debt. (The average is diluted by households which have paid off their mortgage).
Three years later it had dropped back below 10 per cent. But it remains higher than the average (8.3 per cent) prevailing in the 15 years before the mid-2000s boom.
And that is despite floating mortgage rates which are the lowest they have been since 1965.
They are not going to stay this low. The only questions at this stage are when the Reserve Bank will start to raise interest rates, how fast and how far.
Ultimately mortgages and rents have to be paid out of incomes.
The statisticians tell us that average household incomes from all sources rose 3 per cent between June 2008 and June 2011. That is 3 per cent in total, not per annum, and in nominal terms, not adjusted for inflation.
The median increase was even lower, 2.5 per cent.
But the economy is recovering, right? The Treasury is forecasting wages to grow by 4 per cent per annum over the next five years, implying real wage growth of 1 to 2 per cent.
That is hardly rip-roaring and in any case it is higher than the consensus among economic forecasters, at least in the near term.
All of this should mean that anyone smacking their lips and rubbing their hands in anticipation of another housing boom - or another outbreak of house price inflation to call it by its real name - is liable to be disappointed.
But the danger is not negligible.
House prices do need to rise for fundamental supply-and-demand reasons in Auckland and Christchurch. A slump in new construction in Auckland in recent years has led to excess demand.
Westpac economists point out that over the three years to June last year there was only one new dwelling consent issued for every seven people added to Auckland's population - little more than a third of the rate required.
The Real Estate Institute reported this week that its housing price index has risen 4.2 per cent for the country as a whole over the past year and is now only 1.1 per cent below its peak in November 2007.
In Auckland, which represents about 30 per cent of the national housing stock by number and 40 per cent by value, the rise was 5.9 per cent and it is now 1.3 per cent above its 2007 peak.
But Wellington only managed 0.7 per cent over the past year and the rest of the North Island 0.4 per cent.
While last month's turnover at 7330 properties was up on the March average of just under 6000 for the previous four years, it remains well below the average of nearly 11,000 for March in the 2004 to 2007 boom years.
The risk is that a rise in prices needed to pull the construction sector out of its torpor and meet pent-up demand will also set off a bandwagon effect and a return to the speculative pathology of the 2000s.
Too many people thought that the way to provide for their old age was not to save money but to borrow money and make highly leveraged bets on the investment property market.
They paid prices which made no sense in terms of rental yield but were all about negative gearing to tax-shelter other income and the pursuit of untaxed capital gains. And in the process they bid up the prices would-be first home buyers faced.
The Productivity Commission found that between 2001 and 2006 the number of "intermediate renters" - households with at least one person in employment, who cannot afford to buy a dwelling at the lower quartile price, assuming standard bank lending criteria - increased by over 150 per cent to 187,000 households or 58 per cent of all private renters.
Finance Minister Bill English likes to remind us that since the last housing boom, financed largely by foreigners' savings, there has been a global financial crisis and a big shift in attitudes towards small heavily indebted countries.
Even if we wanted to borrow like there was no tomorrow to buy houses - and there is no sign at all of that in the credit growth numbers at this point - the rest of the world would not be willing to fund it, he argues.
This may be too sanguine. Central banks around the world have, in their various ways, been printing money on a spectacular scale, some of which may find its way to New Zealand.
The Reserve Bank discovered during the last decade how hard it can be to effectively tighten monetary policy here when the world is awash with cheap money - at least without doing serious collateral damage via the exchange rate.
But another legacy of the GFC is that authorities such as the Reserve Bank are equipping themselves with "macroprudential" tools to head off incipient asset booms and lessen their reliance on the blunt instrument of a policy interest rate. These include powers to regulate loan-to-value ratios or to require banks to hold more capital relative to the size of their loan book.
On the taxation front changes in the 2010 Budget - lowering the top tax rate and thereby reducing the attractiveness of highly geared investment property as a tax shelter, and the scrapping of depreciation allowances on buildings - should dampen demand from investors.
If they prove insufficient to deter another bout of tax-driven property speculation, the option of a capital gains tax remains.By Brian Fallow Email Brian