Based on a recent paper from New Zealand research centre Motu, the UBS report proposes that the housing markets of the two countries behave almost as one, driven more by global factors than local peculiarities.

It finds that, over time, the countries' convergent monetary and fiscal policies or global factors are more influential than divergent factors such as local regulations and macro-prudential measures, migration patterns and supply and demand dynamics.

"Indeed, the research suggests the 16 main cities across the two countries and 5000 kilometres are actually a single housing market driven by a single 'common factor'," says UBS.

"And this is despite the distance between these cities being vastly greater than what is typically considered a 'commuting distance', which is a key driver of house price convergence typically seen in other countries."

By comparing long-term price trends across Sydney, Melbourne, Auckland, Brisbane, Wellington, Perth, Adelaide, Hamilton, Canberra, Christchurch, Tauranga, Dunedin, Darwin, Napier-Hastings, Palmerston North and Hobart, the researchers concluded that the housing markets move more or less in lock-step.

Although the degree of similarity differs between different pairs of cities, researchers found a 'single weak form' link between the two housing markets.

What's more, it was able to group the 16 sample markets into trend-setters, followers and, finally, the laggards. Not surprisingly, the two largest cities - Sydney and Melbourne - lead the way, with Adelaide, Canberra and Brisbane also in that mix.

This group is followed by Perth, Hobart, Wellington, Auckland and Darwin, with the rest - all in New Zealand - bringing up the rear.

"Overall, the research concludes that there is a common shock that is first felt in Melbourne and Sydney, which then flows to the more peripheral Australian cities, as well as the key New Zealand cities of Auckland and Wellington, before eventually impacting peripheral cities in New Zealand," UBS says.

"This could be the transmission of global forces, the impact of migration trends, or the consequence of convergent Reserve Bank of Australia and Reserve Bank of New Zealand monetary policy."

According to UBS, all this shows the limitations of independent monetary policies against global forces, and the limited ability of New Zealand to influence its housing markets, except "temporarily with rates or macro-prudential policies".

Conversely, "structural policies that improve housing affordability in Melbourne and Sydney - such as easing land supply or planning constraints, lowering housing taxes or the like - may have the ability to reduce the upward pressure on house prices in other Australian and all New Zealand cities," says UBS.