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Auckland City Mayor Dick Hubbard says the region's growth, urban drift and immigration are the reasons it will continue to get more expensive and difficult to own a home in the country's biggest city.
Mr Hubbard was commenting on a study that found the home ownership rate in Auckland is set to fall to 58.3 per cent by 2016 as prices go up and up.
The report by Motu Economic and Public Policy Research, written for the Centre for Housing Research, found Auckland home ownership rates were already significantly below the rest of the country and declining.
Mr Hubbard said the new report ignored the high growth of the region, which took 70 per cent of all new immigrants.
"If you had less growth in Auckland, if you had less immigration in Auckland, prices would fall, it's as simple as that," he said. "The report totally ignores that side of things."
Manukau Mayor Sir Barry Curtis said government help would be needed to make a significant difference.
"The cost of housing in New Zealand has got out of all proportion," Sir Barry said.
"It's not just the cost of building, the cost of building materials, but it's also the cost of land.
"The cost of land has skyrocketed over the last 10 years."
Sir Barry believed "metropolitan limits" had prevented the opening up of land for residential development, pushing up prices.
United Future's commerce spokesman, Gordon Copeland, said the research underlined the need to free up land for housing.
"It is clear that the supply of land for new housing has been artificially constrained in Auckland and elsewhere for some years now," Mr Copeland said.
"The economic equation is fairly simple. If the supply of land stays ahead of the demand, then its price will moderate, making new housing more affordable.
"Affordable new housing will, in turn, constrain the price of the existing housing stock since it opens up an alternative option for home-buyers.
"Clearly these fundamental economic realities have been forgotten over the last 15 years or so."
Mr Copeland said an inquiry into housing affordability by Parliament's commerce committee would examine the issues.
But he said given the urgency of the housing crunch, the Government needed to adopt the recommendations of the report, including making urban fringe land available for housing and penalising councils for delaying consents.
- NZPA
