The Government will on Monday issue a proposal to try to make housing more affordable.
It is about three times harder for an average family to buy an average house now than it was in 1980, because house prices have risen much faster than incomes.
To combat this, the Government last year asked the Productivity Commission to investigate.
The commission identified several culprits: an inefficient building industry, cumbersome and expensive council processes and a restricted supply of land on which to build houses.
The Government has been mulling this since March and its response will be taken to the Cabinet on Monday by a group of ministers led by Finance Minister Bill English.
It is expected the Government will focus on improving the efficiency of the building trade and increasing the supply of land for building homes.
It will also try to reform the 5% of housing run by councils or central Government as a social service.
Mr English told the Q + A programme on TVNZ that until the Productivity Commission report was released people assumed that house prices would keep increasing and that has turned out to be quite dangerous for New Zealand.
"We don't accept that house prices automatically have to rise and we don't accept that a lot of New Zealanders are automatically cut out of home ownership because they can't find the half a million dollars you need for a starter home in Auckland".