The Institute of Economic Research is warning of a future housing shortage in New Zealand unless building activity picks up.
The institute has been researching the link between housing supply and demand and concludes there is no housing shortage at present.
However, the institute's principal economist, Shamubeel Eaqub, says while population growth has been strong, the construction of new homes has practically halved in the past two years.
The problem stems from less activity during the recession, steady population growth, and a tendency for fewer people to live in each house.
Mr Eaqub says the curent level of building is very low, and if it persists, there will be real problems in two to three years.
He says recent revivals in house prices have different causes, mainly that not enough houses are actually being offered for sale compared with demand for properties.
The Certified Builders Association says New Zealand needs to build 20,000 new houses a year to meet population increases - but only 14,000 to 15,000 are actually being constructed.
The lobby group believes the worst is over for the sector but more is needed to avert a serious housing shortage.