Earthquake Recovery Minister Gerry Brownlee has been accused of having his "head planted firmly in the liquefaction" over a housing shortage in Christchurch.
In the past week, there have been reports of Christchurch people facing homelessness due to rising rents, and welfare agencies have said they are being stretched thin by demand.
The latest ASB quarterly economic forecast released today predicted house prices would continue to rise this year, with an annual increase rate of about 5 per cent nationwide.
ASB chief economist Nick Tuffley said under-building in recent years, combined with the housing shortage created by the Canterbury earthquakes, meant the situation was particularly tight in Christchurch.
Mr Brownlee last week said his political opponents were talking up the scale of the problem.
"This is a problem, I'll accept that, but I don't think this is a crisis," he told The Press on Friday.
Christchurch Mayor Bob Parker disagreed, telling TV3's The Nation that some individuals were facing a crisis.
"Over the whole of the city I would put it in the frame of being an issue," Mr Parker said.
"It's an issue that will get bigger and bigger and bigger unless we figure out how we're going to resolve it, and unless we get more properties on to the market."
New Zealand First earthquake issues spokesman Denis O'Rourke said Mr Brownlee's claim that there was no crisis was "outrageous", and called for the Government to intervene in the Christchurch situation.
"Mr Brownlee has got his head planted firmly in the liquefaction if he thinks that doing nothing is the solution. He has now become a large part of the problem himself."
Mr O'Rourke, a former Christchurch City councillor, quoted Trade Me figures released last week which showed the city's demand for housing had increased by 42 per cent, the supply had reduced by 40 per cent, and rents had increased by 15 per cent since last year.