Why are house prices so ruinously high in New Zealand? Is it too much migration or too few controls on foreign buying?
In a KPMG report this week, bank executives mused that foreign cash buyers were pumping up asset values.
Are too few houses being built in Auckland?
In a select committee hearing this week, Reserve Bank Governor Graeme Wheeler said a lack of new dwelling units, particularly in apartment blocks in the leafy suburbs of Grey Lynn, Ponsonby, Parnell, Mt Eden and Epsom, were responsible for the dangerous overvaluation.
He said Nimby (Not in My Back Yard) types should be put back in their boxes.
Are there too many discounts from banks on fixed mortgages or is it the lack of a capital gains tax?
Labour leader Andrew Little says the mere mention of a capital gains tax is too politically explosive to be associated with.
Prime Minister John Key certainly leapt on the opportunity to paint such a tax as an un-New Zealand death duty that most would reject as an unpatriotic attack on a sacred New Zild right of wealth creation.
All these reasons for over valuation may be true but what if the reason were closely connected to a European city about the size of Hamilton?
Maybe the astonishing valuations of Auckland houses have nothing to do with supply of housing and demand of incomes. Maybe they're all about the ability to borrow more money to bid up prices.
That's the disturbing conclusion of economists from the US Federal Reserve and the Universities of California and Bonn.
They argue banks have been lending much more to buyers since 1989, which has contributed to the doubling and trebling of prices since then in most developed countries.
It's the "blame it on Basel" theory.
This Swiss city is where bankers of the world get together to decide the rules on how much capital banks must put aside to back loans.
In 1989, the Basel-based Bank for International Settlements (BIS) ruled that mortgages were the least risky form of borrowing and therefore banks had to put aside the least amount of capital for these loans.
The argument was that homeowners would pay mortgages before other spending.
The end result of this piece of financial bureaucracy was an in-built bias in favour of mortgages rather than business builders.
This led to a sharp increase in the proportion of lending to home buyers. Mortgage lending to GDP ratios rose from two times GDP in the developed world in the late 1980s to about six times GDP now.
Think about that. Banks were prepared to lend three times as much for the same property and the same income attached to that property as before 1989.
New Zealand is part of this trend. Reserve Bank figures show the proportion of lending linked to mortgages has risen from close to 40 per cent of lending in the early 1980s to nearer to 60 per cent now.
Throughout the developed world, central banks and financial regulators are grappling with this historical accident.
Many are trying to unwind the Basel experiment.
We will find out in the months to come if the Reserve Bank is as committed to reducing the leverage in New Zealand's banking system to mortgages.
Meanwhile, the debate about housing should include the questions about how much money banks pump into property.