A new report says it's scandalous that ordinary New Zealanders are being priced out of the housing market.
The report by the New Zealand Initiative is one in a series finding New Zealand houses expensive relative to wages compared with other western countries.
Co-author Luke Malpass said the industry is failing to produce enough houses.
Record housebuilding of 34,000 in 1974 fell to 15,000 last year, despite New Zealand having a much higher population.
This pent-up demand pushes up prices and is the main cause of unaffordable homes.
The report said fears of urban sprawl restricts the supply of building sites, but this is unwarranted because only 1% of New Zealand land is built up.
It said it must be made easier to build new homes both inside cities and on urban fringes.
The New Zealand Initiative was formed from the New Zealand Institute and the Business Round Table.
