During the 2000s, rents rose roughly in line with the consumers price index while house prices soared in real terms. That disconnect was an important safety valve.
But that was then and this is now. The 2010 Budget eliminated a tax deduction for depreciation landlords could claim. A change of government is likely to see the introduction of a capital gains tax on investment properties.
So rental yields are likely to matter more to investors in the future.
The policymakers' hope is that over time, such tax changes will reduce how far investors will go in bidding up the price of properties, especially at the lower end of the market which in the last boom rose faster than house prices overall.
But in conditions of scarcity, when the market power is with landlords, it is more likely the squeeze will be on tenants.
The Productivity Commission noted in the June 2011 year household spending on rent rose faster than incomes, concluding "the current disconnect between rents and house prices may not persist".
It also cited a Statistics NZ survey which found that two-thirds of renters said they had major problems with their housing, such as being too damp, too cold, too small or far from their work. Even from a narrow fiscal standpoint to have a significant proportion of children growing up in conditions of poverty and overcrowding is myopic and dumb.
Yet the package announced this week barely mentions social housing.
Apparently there is a reform programme under way in that space. Its next phase will focus on increasing tenants' "social and housing mobility", which rather begs the question where they expect people to move on to.
Finance Minister Bill English is clearly not happy with the mounting fiscal cost of housing subsidies, including accommodation supplements, now approaching $2 billion a year, though he acknowledged that any changes in this area would have to be mindful of the unenviable financial circumstances of people receiving this kind of assistance.
So why not embark on a major programme of state house construction? The Government just doesn't want to borrow the money.
It seems to believe it could never persuade international markets there is an important difference between borrowing to fund an operating deficit and borrowing to fund long-lived physical assets with enduring socio-economic benefits.
Auckland house prices rose around 8 per cent over the past year, despite the fact that more than 48,000 people left New Zealand for Australia and overall net migration was negative.
As the Australian mining boom comes off the boil net migration is likely to turn positive again, adding to the demand side of the housing market.
In the longer term, however, the dismal combination of relatively low wages and relatively expensive housing will only add to one of the economy's gravest problems, the hollowing out of the labour force by a haemorrhagic rate of emigration, especially in younger age groups.
So one might have thought the housing affordability package would be particularly focused on the issue of starter homes - the missing first rung of the housing ladder for owner-occupiers.
Yesterday's building consents data show the extent to which construction is skewed towards high-end properties. The average value of a dwelling consent issued last month was $320,000 and the average area 199sq m. That includes apartments.
The usual explanation offered is that this pattern, where the construction market is working fine at the top end but hardly at all at the bottom end, reflects the cost of land and the need to maintain some kind of proportionality between the value of a section and the size and quality of the house built on it.
In 1993 I bought a section and built a modest house on it.
A few weeks ago a similar-sized section came on the market just down the road. The asking price was exactly six times what I paid, less than 20 years ago, a compound rate of land-price inflation of around 10 per cent a year.
Journalists' salaries, I need hardly say, have not risen at that rate.
The Government would, no doubt, say that such anecdotes make the case for moves to make more land available. But it also acknowledges that the measures it proposes - which in any case depend on the co-operation of local authorities and an ability to manage nimby resistance from those already on the housing ladder - are about relieving pressure in the medium term. They are not a quick fix.
The measures are also entirely targeted at the supply side. The Government has ignored the potential of a demand-side intervention along the lines of the old State Advances programme, targeted at the starter home area where market failure is most evident.
The Government can borrow 10-year money at around 3.5 per cent. Why not make 10-year fixed-rate mortgages available at, say, 4 per cent which can only be used to purchase newly built homes below a certain size, say 100sq m?
The risk with measures like low-interest loans is that they just mask underlying problems, English says.
Sure, any such intervention would cause some distortions, but the test should be whether it is the lesser evil.
As things stand, when resurgent demand hits sluggish supply, the effect on prices and household debt levels is entirely predictable.
English is right to point to that debt as a major vulnerability for the economy as a whole, should the foreign suppliers of credit go off us, and as limiting investment in more productive things.
"We don't accept the only way to own a home is to be trapped with a huge burden of debt," he said.
But his reluctance to see the Government's balance sheet expanded in the cause of ensuring some affordable housing gets built only increases the risk of exactly the outcome he declares unacceptable.
We're lucky the last housing boom wasn't followed by a bust of the kind that has blighted some Northern Hemisphere economies. We dodged the bullet. But that doesn't make us bullet-proof.
