"The economy is caught between two risks," said NZIER economist Kirdan Lees, who set up the shadow board.
"Drought will stifle production, but rising house prices, fuelled by surging mortgage growth, present an upside risk to inflation."
Bank of New Zealand head of research Stephen Toplis sees a stronger case for a higher OCR than a lower one.
"Leaving rates where they are now is probably the wrong decision. The problem is only time will tell us which way the Reserve Bank has got it wrong," Toplis said.
"The eventual outcome will depend on the tug of war between strengthening domestic demand [particularly housing], on the upside, and the drought on the downside
"We remain mildly optimistic [hence the upside bias] but increasingly nervous."
NZIER principal economist Shamubeel Eaqub is emphatic that the bank should not raise interest rates yet, citing a high New Zealand dollar, plenty of spare capacity in the economy, the risk of drought knocking 0.5 to 1 per cent off gross domestic product and a brittle global economy.
"But the balance of risks for the Reserve Bank is shifting. Resurgent house prices and mortgage borrowing are the key upside risks," Eaqub said.
"The bank should wait to see if Auckland and Canterbury house prices ease as new supply comes on, and move aggressively, including using macro-prudential tools, if not."