Prime Minister John Key made it clear this week that housing remains an important issue for the Government.
While acknowledging rising prices are of great concern in Auckland and, to a lesser extent, Christchurch, he also noted the problem was becoming a nationwide issue.
The Government's view is it can improve the supply side of the market so housing becomes more affordable.
To do that, it is wanting to establish housing accords, in partnership with local government, to create special housing areas.
The accords aim to streamline the planning and consenting process, getting central and local government working more closely on housing development.
It is a noble aim, and one which would be generally applauded except for some matters surrounding the overheated market in Auckland and Christchurch - for similar yet different reasons.
In Auckland, increasing numbers of returning New Zealanders are placing pressure on the market. Immigrants, sometimes cash rich, are also in the market - lifting the price of houses in desirable suburbs.
New home buyers, and even long-time owners finding the lure of cash too hard to resist, are heading south and west, and prices there are now starting to rise beyond the reach of people wanting to buy their first home.
In Christchurch, ongoing delays with the city rebuild, and a suggestion now that EQC valuations may not be correct, have pushed house rentals higher. Increasing numbers of overseas construction staff are seeking housing. Trying to buy a home in the earthquake-damaged city has become a challenge for many.
The Reserve Bank continues to be concerned about the country's housing market, noting yesterday the rapid house price inflation persisting in Auckland and Canterbury.
The central bank says it does not want to see financial or price stability compromised by housing demand getting too far ahead of supply.
One of the options the Reserve Bank is expected to bring in later this year is loan-to-value ratios, or LVRs, which will require house buyers to have a 20% deposit or thereabouts.
That seems fine for existing home owners seeking to upgrade, but in Auckland and Christchurch finding a 20% deposit in a soaring market is difficult. Mortgage brokers are already suggesting ways around the requirement - such as gifts and from families - and where there is a will, there is usually a way.
Low interest rates are encouraging buyers, because mortgages are affordable. Rates will not stay low forever, but home buyers do not look too far past the initial interest rate.
The challenge the Reserve Bank faces is how to structure LVRs in such a way that a two-income couple, able to pay a large mortgage, are able to get into the housing market in Auckland, in particular, without hurting the chances of those in the South.
It has been suggested in this newspaper that the Reserve Bank designate cities such as Christchurch as a special mortgage area, leaving other parts of the country to carry on as before.
The Reserve Bank, meanwhile, has made it clear its official cash rate will remain at 2.5% for the rest of the year, despite its concerns over housing.
Mr Key maintains his first priority for housing is for first-home buyers, something he has said before. Absent of any other alternative, rapidly increasing house prices may still yet see the Reserve Bank raise interest rates, which will affect everyone.
The challenge for Mr Key is his view that controlling demand for housing is largely under the purview of the independent Reserve Bank.
How then can he push forward with housing accords, continue to make first-home buyers a priority and remain keen to see all New Zealanders have the opportunity to buy a house?
The Government has set a target with its Auckland housing accord of building 39,000 homes during the next three years, significantly more than the number being built now. In the South, Queenstown and Arrowtown face housing shortages and rising prices.
If Mr Key and his government colleagues want to be taken seriously on addressing soaring house prices, they need to understand problems exist in all parts of New Zealand, not just Auckland.
A comprehensive plan must be developed to remove any suggestion only the wealthy will benefit from the introduction of LVRs.
