A second banking chief has denied Auckland has a housing bubble, saying many factors were combining to drive prices up including the city's sheer desirability.
David Hisco, ANZ chief executive, said while he sympathised with first-home buyers, the city was merely falling into line with Australia.
His comments follow BNZ chief executive Anthony Healy who said last week he did not believe the Auckland property market was entering bubble territory, but New Zealand was facing a "real issue" around housing affordability.
Hisco said Auckland was now more like major Australian hubs.
"I really feel for young people trying to get a foot on the property ladder in central Auckland," Hisco said.
"The prices are high by historical New Zealand standards but not high compared with similar areas in Melbourne and Sydney.
"Some people may have to change their expectations and move further south, north or west where houses are more affordable. This is why it's critical Auckland hurries up and improves its public transport," he said.
"The issue in Auckland is not a bubble. It's not a case of easy credit - if anything banks have tightened up lending criteria since the global financial crisis in 2008."
With the Australian and European economies slowing fewer Kiwis were heading overseas and those overseas were coming home, Hisco said.
"When coupled with immigration there are a lot of people coming into Auckland. It's a simple supply and demand equation.
"The only way house price inflation will ease is if there's a dramatic increase in supply or a dramatic decrease in demand.
"Investors may also find that yields become unacceptable and that could bring more stock on to the market at better prices," he said.
"It's also important to remember that Auckland is one of a handful of very desirable cities around the Pacific Rim and the current prices reflect the fact that plenty of people want to enjoy that great lifestyle - a magnificent harbour, good education, reasonable infrastructure and other opportunities here. So, in some ways, we're also a victim of our own success," he said.
"Current owner occupiers need to be mindful that whilst their house is increasing in value they should be careful about borrowing against the increased equity.
"Right now, I wouldn't buy unless I had to find a place to live. Net property yields are quite low and there are other reasonable yields around that are more liquid than property if investing is what you want to do."