Finance Minister Bill English says housing can be made more affordable by focusing on land supply, consent processes and productivity in the construction sector.
In his fifth Budget, delivered on Thursday, Mr English released details of how the Government intends to try to put a brake on rising house prices.
Legislation was introduced on Thursday to improve housing affordability by enabling local authorities to fast-track planning procedures for new housing developments.
This will be subject to accords between the Government and councils in areas where housing is least affordable.
But if a local authority does not agree the Government will have the power to step in and override the council's planning authority.
"Council approvals for those areas can be managed under a streamlined process," Mr English told Parliament on Thursday.
"Where agreements cannot be reached, or targets aren't met, the Government will be able to issue the consents itself.
"This legislation, which will apply for three years, is an immediate response to housing pressures in areas facing severe affordability problems."
Another bill was introduced on Thursday to extend income-related rents to community housing providers and bring in reviewable tenancies for all Housing New Zealand tenants
Cost 'excessive' - Minister
Mr English told Radio New Zealand's Checkpoint programme that housing in places such as Tauranga, Queenstown, Hamilton and Christchurch costs far more than it should.
He says the Government reserves the right to take over the consent process if agreement on the area to be developed cannot be reached.
"If there's no agreement or if there's agreement but the targets aren't met, then the legislation will give the Government power to issue consents for new housing. Now we would regard that a reserve power that we would not expect to be using."
Mr English says the move is a signal to developers that the strategy of sitting on their land and waiting for the price to rise may no longer work.
