An international housing expert believes house prices in New Zealand are twice what they should be, and up to three times in Auckland.
The 10th annual Demographia International Housing Affordability Survey, which ranks 360 cities in 10 countries according to their affordability, named New Zealand as having one of the least affordable markets in the world. Auckland ranked 347th of the 360 cities.
That's because it costs five-and-a-half times the median income to buy a median-priced home, while Auckland has a multiple of eight.
Study co-author Hugh Pavletich said affordable homes should cost no more than two to three times the median income.
New Zealand was facing a serious property bubble, and prices would need to fall dramatically in order for homes to become affordable.
"We've got a big, big bubble in New Zealand right across the board. Roughly housing is about double the price it should be but in Auckland it's probably three times as much," Mr Pavletich said.
"The prices are grossly elevated and the median multiple is a very good measure. Anything times three in household incomes is basically bubble value."
That meant there was a huge risk to the economy as a result of the mortgage debt needed to fuel the bubble, something the Reserve Bank had made clear during the past few years, he said.
Improving home affordability was largely down to removing political and regulatory roadblocks, Mr Pavletich said.
"We've had massive public discussion of these issues over many, many years, with inquiries and research, and we all know what the problems are - lack of land supply, affordable land supply and proper infrastructure financing."
The Government was addressing the issue by entering into housing accords with major councils but the process needed to speed up, he said.
After Auckland, Tauranga and the western Bay of Plenty were the next most unaffordable cities, followed by Christchurch and Wellington.