Higher-for-longer interest rates and affordability pressures are forecast to keep house prices in check over the coming years.

BNZ chief economist Mike Jones on Thursday updated his predictions for where house prices would go this year.

He said it was likely there would only be a 2 percent increase in house prices over 2024, and there was a chance it might not be that high.

Previously, he had expected 5 percent.

He still expected a 7 percent increase over 2025.

"Last year's short string of monthly house price gains now look like a false start. And we think current scratchy momentum will stick around for longer amid high mortgage rates, a deteriorating economic and labour market backdrop, and a jump in unsold inventory."

The Reserve Bank indicated on Wednesday that it is holding firm to its view that official cash rate (OCR) cuts are some time away - and had even discussed the possibility of an increase this week.

"The prospect of mortgage rates sticking around higher levels for longer adds to the case for a lower house price track this year at least," Jones said.

Forecasts for a faster upturn this year had assumed interest rates would fall faster, or that migration would put pressure on house prices.

So far, the population growth was having more of an effect on the rental market, he said.

"It hasn't spilt through into house prices more generally. There's still a chance we see that as we go through this year and into next year - it looks like we have a shortage of houses overall - but we're certainly not seeing that at the moment."

He said he still expected a more obvious upswing in prices next year.

"More demand-friendly housing policies, population pressures, and a stabilising economy will add support. Acting in the other direction, affordability and cash flow constraints will cap the magnitude of any upturn."

Mortgage rates were part of a wider cashflow crunch, he said. "There is pressure on household and individual finances - they have bigger fish to fry rather than participating in the housing market. Making the numbers work at the moment is difficult. Something has to give - we need to see mortgage rates come down before we see the house price cycle turn."

Westpac chief economist Kelly Eckhold said he still expected an increase of 5.8 percent this year and 6.7 percent in 2025. ANZ expects a drop in the June quarter, and lifts between 1.2 percent and 1.5 percent each quarter over the next five. ASB economists were rethinking their forecasts.

Corelogic chief economist Kelvin Davidson said he had had a 5 percent prediction for this year for a while now but it could be closer to 2 percent or 3 percent.

Gareth Kiernan, chief forecaster at Infometrics, said he expected house prices to be at 2023 levels in mid-2026.

"Our forecast horizon is mid-2029 and we still think house prices will be below the 2021 peak at that point.

"That's built around housing affordability and debt servicing costs. That's not to say that interest rates won't come down from here but it won't mean housing is particularly affordable."