A national policy statement due to be unveiled today will not be the silver bullet that solves Auckland's housing problems, the government says.
The controversial policy will allow the government to dictate when more land needs to be zoned for housing, and could override the Auckland Council's own plans.
QV figures show the average property price in the city has increased 15.4 percent year on year and, if it continues to rise, by this time next year the average value will top $1m.
Housing Minister Nick Smith said prices were rising too fast.
"It is not satisfactory. We need to get our house price increases back to single digits. The single most important thing we can do to achieve that is in growing supply," he said.
Exactly how the government planned to do that would be spelled out today, in its National Policy Statement on Urban Development.
The policy would apply to all local bodies but focus on Auckland, where the government believed past planning policies had fuelled land and house price rises.
Dr Smith said a clear problem was the price of land.
"The average section price in Auckland is $450,000, up from $100,000 in 1990. That is a growth of 350 percent and that is why the questions of land supply and section price is absolutely critical to the solution," he said.
Prime Minister John Key has hinted a price-to-income ratio could be used to force local authorities to release land for new housing if house prices climb too far out of people's reach.
But Dr Smith warned there was no quick fix.
"I don't think any one particular thing from a national policy statement to a 'bright line' test [on capital gains] of itself will be the silver bullet, but I think overall a combination of it will," he said.
Labour housing spokesperson Phil Twyford said none of the government's housing policies had any lasting impact, and the latest QV numbers showed the market was running hot again.
The national policy statement needed to include two things, he said.
"The government has to come up with an answer on infrastructure. Seventeen billion for infrastructure in Auckland is needed. Is the Auckland ratepayer expected to pick up the tab?
"The other thing is they can't just introduce new land into the supply. In a highly speculative land market, that's just feeding the speculation.
"They've got to do away with the urban growth boundary and replace it with a smarter way to manage growth."