Finance Minister Bill English's comments about a possible Auckland house price crash are a "last throw of the dice" to address Government inaction on housing, the Labour Party says.

Experts said English's concerns were unlikely to spook buyers or sellers.

In a just-released speech to Victoria University last week, English said the city could be at risk of a crash when an oversupply of houses hit the market eight years after initial demand.

"I'm yet to find a housing market anywhere in the world where prices go up at over 20 per cent a year without stopping and then starting to come down again.

"It may be that we are unique – but that seems unlikely. So we're concerned about the housing market," he said.

Labour Party finance spokesman Grant Robertson accused English of "again trying to shift the blame" onto councils for Auckland housing shortfalls.

Robertson said that while it was possible the housing bubble could burst, the Productivity Commission had suggested that Auckland was not facing an oversupply of housing but a shortfall of 60,000 homes by 2020, if current building rates continued.

"He has had seven years holding the purse strings and has only taken grudging measures to increase house building that will not significantly increase supply.

"He has resorted to talking down house prices because none of National's measures have succeeded."
Some media took English's speech as predicting a housing crash in 2021, starting from 2013 when Auckland house prices took off.

But John Tookey, a professor of construction management at AUT, said while English's comments would put people on alert, they would probably not turn the housing market downwards.

Auckland house prices were being forced up by speculation. "If people are deterred from that, for one reason or another, that will be relatively speaking a good outcome for society.

But he felt real-world factors such as interest rates were of much greater significance.

"The use of the word crash certainly is a polemic moment ... Is a correction coming? Yes absolutely. Is it going to be a catastrophic collapse? I would not consider that to be as likely as a deflationary hiss."

Daniel Coulson, chief auctioneer and national residential manager for real estate agents Bayleys, said investors were still looking at historically low interest rates, record immigration and more development opportunities.

"He is the finance minister so people are obviously going to listen to him, but the most recent news I can give you is we had 14 auctions scheduled for today and 10 have sold. So it doesn't seem to be that people are deterred in the market.

"Once buyers and sellers realise that the dust has settled, the world hasn't fallen over and it's business as usual, things become pretty normal again."

Larry Murphy, a property professor at Auckland University, questioned the idea of an eight-year property market cycle cited by English.

Murphy said property cycles had a variety of drivers, and crashes were started not by soaring house prices per se, but by banking problems and economic slowdowns.

"When you talk about a cycle, it's hard to actually just say it will be five, six, seven, eight years because cycles have different durations and different amplitudes.

"So you can have a cycle in the US that lasts for 10, 15 years, coming up to 2006, whereas other cycles may be five to six years.

"We talk about home ownership and housing as if these are static things that never change. But if you actually look at the way we buy houses, the way in which the banks access money, the way in which we access money, has changed dramatically in the last 20 or 30 years.

"So it used to be the case that our housing market was determined by what was happening in New Zealand primarily. But now you can have global shifts and flows of money and access to cheap global money can pump up our demand very rapidly."

He also questioned English's focus on planning hurdles as a major reason for the market taking so long to react to demand.

English's speech raised the ire of town planners who said it had unfairly laid inequality, poverty and the lack of affordable housing largely at their feet.

The New Zealand Planning Institute said local planning policy was but one piece of the jigsaw used to influence housing affordability "and not a large piece at that".

"Other pieces of the puzzle that have a significant impact on levels of affordable housing are the inability to build at scale, the relatively high cost of building materials within New Zealand, land banking by developers, our tax structure, our interest rates and profiteering. "

Simply releasing land for housing did not equate to more affordable houses, or Auckland's Special Housing Areas would have already taken the heat out of the Auckland market, the institute said.

It suggested the Government could help by discouraging investor incentives that lead to "land banking" and by doing more to encourage new infrastructure and competition in the building materials industry.