Finance Minister Bill English is signalling a ramp-up of Government intervention in Auckland's private sector housing market.
"The Government will be a provider for the next 10 years of significant numbers of medium-density, medium-priced housing into the Auckland market," he told the Herald in an interview.
"Over the next six months, you'll also see a growing understanding of the size of the Government building programme and that will have an effect on the market.
He said Auckland's new Unitary Plan allowed Housing New Zealand to increase the number of houses it could have on its land from up to 30,000 previously to 69,000 under the new plan.
"And we are going to do it."
That would include the renewal of social housing stock where that was required "but it will generate an extra 30,000 houses."
Labour's Phil Twyford welcomed greater Government intervention but said it is typical of National when it came to housing policy.
"It's a day late and a dollar short."
For the past five years, it had been pouring scorn on the idea of a Government-backed building programme, "conjuring up the idea of great Soviet-style apartment blocks".
"The abject failure of their policy to deliver any kind of significant increase in houses that people can actually live in has dragged them kicking and screaming towards the idea of more Government intervention in building."
Twyford was also concerned that Housing New Zealand could sell off too much of its land to the private sector and leave it short in future to increase its own stock.
English's comments suggest that within the next six months there will be a lot more developments of the kind announced last month for Northcote which will replace 300 existing homes with 1200.
Of the 1200, two thirds will be for the private sector.
English was responding to questions about the Auckland property market in the light of new Quotable Valuable figures last week.
They showed that Auckland house price inflation had slowed to an annual rate of 15 per cent in the year to September - compared with 20.4 per cent in the year to the previous September.
But the average value of a house in the Auckland region is $1,013,632.
The huge inflation gains in the past year have been in Wellington at 21 per cent there (average value $536,065) compared to 2.4 per cent the previous year, and 30.7 per cent in Queenstown (average value $930,154) compared with 9.5 per cent the previous year.
Asked if the Auckland figures showed that the residential market had turned a corner, English said it was too soon to say but the heat had been taken out of it.
"All I'd say is looking out ahead, you are starting to get the market saying 'oh looks a bit over-stretched."
"The fact that people have moved out and are moving to Wellington, Christchurch, Oamaru, everywhere, tells you that you are getting through the cycle because if it was still hot in Auckland, they'd all stay there."
Labour already has a policy of Government provision of affordable homes under its Kiwi Build policy but it is much more ambitious than English is suggesting.
The fact that people have moved out and are moving to Wellington, Christchurch, Oamaru, everywhere, tells you that you are getting through the cycle because if it was still hot in Auckland, they'd all stay there.
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Labour's aims to build 100,000 affordable homes for first home buyers over 10 years, with $2 billion of taxpayer funding as a revolving loan fund.
English's comment to the Herald follow a speech by Housing New Zealand chief executive Andrew McKenzie last month in Christchurch at which he hinted at a much bigger role for the corporation in increasing private sector supply, as well as renewal of its own rental stock.
"We have been asked to look at availability and supply," Hive News reported him saying.
"There is role we have around improving and increasing the level of supply, and obviously affordability is a really important element to that."