Australian Treasurer Joe Hockey called the economy of New Zealand "the envy of the world" during his visit to the small island nation across the Tasman. In an interview with TV ONE, Hockey said Australia could learn some lessons from New Zealand.

He said Prime Minister Key's government is a "standout" around the world. He praised the New Zealand government for "heading towards a surplus." Hockey added that the country is beginning to "live within its means."

Delivering his first budget in 2014 in Australia, Hockey said he was "forced" to cut spending by $10 billion because of the previous "overspending" of the Labor government. He said Labor had led the Abbott government to the position of taking immediate action before the country faces bigger debts.

An international ratings agency has warned Australia of its "overheating" housing market despite the country's "very high" economic strength. According to Moody's latest credit analysis of Australia, the real estate market was caught in the middle of a "positive price-feedback loop" in which high prices will lead to even higher prices.

The agency said Australia's housing market may face a correction as the market's price-to-income and price-to-rent ratios are rising to levels above the recorded historical average.

Moody's cited the country's lack of construction boom, strong mortgage buffers, low leverage levels and well-capitalised banking system will reduce the effect of a possible real estate market contraction in the economy.

Unlike Australia, the ongoing construction work in quake-damaged Christchurch has boosted New Zealand's economic growth to its fastest rate in six years. The Reserve Bank forecast a moderate economic growth for New Zealand in 2015. Economists said the 3.8 per cent growth in gross domestic product is the "strongest" the country has ever recorded since the third quarter of 2007.

Although the IMF views banks in New Zealand as sound and well-capitalised, it is concerned about the country's dependence on borrowing. The IMF report said it may be "a continuing source of risk" for New Zealand.