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The Government will try to dig itself out of the Dirty Politics mire when it unveils a housing policy today expected to target Kiwis struggling to enter the property market.
Housing Minister Nick Smith was keeping quiet about details of the policy, but it is expected to be a push for more affordable homes through extra building.
But there are warnings it could be too little, too late, as a new report reveals the housing shortage is worse than previously thought.
The report, by right-wing thinktank, the New Zealand Initiative, and obtained by the Herald on Sunday, claims the country's ageing population will put the squeeze on the housing crisis, and the Government has not been taking this into account.
"This is the greatest crisis facing New Zealand and unless we ramp up supply well beyond current levels, home ownership could be out of reach of most families within 20 years," said director Oliver Hartwich.
New Zealand had an average household size of about 2.6, one of the highest in the OECD, he said.
This was likely to reduce to around two people per household, placing huge strain on the housing market.
"We all say that we've got a massive housing shortfall, we all seem to believe that it's got a lot to do with immigration, but nobody talks about the giant elephant in the room which is changing household sizes. And I think in the future this will be a massive problem."
Hartwich warned that Auckland house prices could reach the stratospheric levels of Sydney if at least 113,800 more houses weren't built within 20 years.
In April, average sale prices for houses in Auckland reached $700,000. According to one recent study, the median Sydney house price was $900,000.
Labour leader David Cunliffe said his party planned to block non-residents from buying property, and a capital gains tax to limit "rollercoaster" house prices.
Housing Minister Nick Smith said Labour's policy was designed to "scratch an itch, whereas I'm focused on addressing the long-term change that's required to improve home ownership and housing affordability."
Smith said the findings of the Productivity Commission would form the basis of his new housing policy. Its report, released in April 2012, said new land should be immediately released for housing development in "high-demand areas" such as Auckland and Christchurch.
The minister said the Government would continue addressing problems of land supply, council development charges and even the cost of construction materials.
- by Bevan Hurley, Herald on Sunday