Real estate firm Harcourts says the Government and Auckland Council need to work with land developers to build more properties.
The company's chief executive Hayden Duncan says demand far outstrips supply, and restrictions should be relaxed on building multi-storey complexes.
Mr Duncan says the company has noticed a drop of nearly 17% in properties for sale in Auckland in the year to May.
He says in the short term, the council and Government need to work with developers to create high-rise properties in the central business district.
