A bank economist says he expects legislation to fast-track building developments will have little effect on rising house prices for at least three years.
Following Thursday's Budget, the Government introduced legislation forcing local authorities to fast-track the approval of new housing developments in areas where it is least affordable - and if it isn't satisfied with progress, it reserves the right to take over the consent process.
Chief BNZ economist Tony Alexander says that will do little to fix the problem.
"Auckland has slipped too far behind in terms of weak construction during the 2000s and then because people thought erroneously that these house prices were going to collapse, there was even weaker construction over the past five years.
"So catching up with a multi-year process is not going to happen for quite some period of time - the prices go higher."
Mr Alexander says he expects they will continue to rise for at least three years.
House prices rose nationally by 9% last year, and in Auckland by 14%.
Signal to developers - English
Finance Minister Bill English says housing in places such as Tauranga, Queenstown, Hamilton and Christchurch costs far more than it should, and it can be made more affordable by making more land available and by ensuring more houses are built to meet demand.
He says the move is a signal to developers that their strategy of sitting on their land and waiting for the price to rise might no longer work.
Mr English concedes, however, that speeding up planning consents is not the only thing that will get more homes built, and the initiatives outlined in the Budget won't solve the problem overnight.
He told Radio New Zealand's Morning Report programme on Friday he expects the expansion in the availability of sections will be coupled with innovation in the building industry to get homes built.
Green Party co-leader Russel Norman says the move will create ghettos on the outskirts of Auckland.
The Real Estate Institute and the Property Council say the Government also needs to lower the cost of building materials, make lending more available and address the high dollar.
Councils 'happy to cooperate'
Local Government New Zealand says councils need to overcome disagreements with the Government and support the plan to free up land for housing.
President Lawrence Yule says the Government will need to work with councils in places where housing is direst, like Auckland and Christchurch.
Mr Yule says the councils there are happy to cooperate and the Government would only override them as a last resort.
