Housing affordability, immigration and what Donald Trump's policies do to our interest rates look like being the big economic election issues this year, says Westpac senior economist Satish Ranchhod.

International uncertainty remains the biggest risk for our economy which looks set to continue growing at above 3 per cent of GDP for the next few years, he told The Economy Hub.

Westpac economists this week published In the Zone - an overview which paints a picture of an extremely benign economy.

Growth is likely to stay strong for the next two years and even if it slows is unlikely to collapse, Ranchhod said.


"There are some enduring factors supporting demand. The big one is the construction cycle."

The external factors like the political uncertainty in the US, UK and Europe presented the biggest risks.

Depending on how those played out we could face a less favourable trade environment or, perhaps more worryingly, less favourable financial conditions.

"That's the big risk for New Zealand. We've had a run up in debt levels, related to the housing market. Interest rates are now rising and that's going to strain a lot of households. If they continue to rise because of offshore conditions that could have quite a dampening effect. "

But the more general economic picture was very positive, he said.

A big part of that was due to the wealth effect of the housing boom.

Ranchhod said he expected to see house price growth cool this year as rates rose but the underlying supply and demand equation was going to keep pressure on prices, particularly in Auckland.

"So this is going to be a big issue as we go into election, and there are questions about what policies we could see put in place," he said.

Supply side solutions, as mooted by the Government could take a long time to work.

"We do think that migration could be one option that's mooted. Particularly as part of post-election coalition discussions."