Evidence that Auckland's property market could be cooling off won't change Labour's focus on housing affordability in election year.

CoreLogic data released to the Weekend Herald has revealed Auckland house values rose by 12.2 per cent last year - half the rate of increase in 2015.

The company has predicted that the rate of growth in the Auckland region this year could drop to 10 per cent.

Labour MPs have returned after a summer holiday for a New Year caucus in Martinborough today and tomorrow.


Prime Minister Bill English, currently in Europe, is yet to call a date for this year's election but the Labour retreat will discuss the year and campaign ahead.

Labour leader Andrew Little said the party's focus will be on a handful of areas - housing affordability, more police to address rising crime rates, improving education and health, and on measures to grow the economy in the long-term.

On the possibility of the housing market cooling down, Little said it would remain a focus.

"We have had those reports before and it tends to be pretty short term. The reality is there is still a significant shortage of housing, especially in Auckland but increasingly in other areas as well. And prices are still way out of reach for far too many people.

"Those two basic problems haven't gone away. So we will continue to talk about that and what our responses are to that."

Herald on Sunday photograph by Doug Sherring.
Herald on Sunday photograph by Doug Sherring.

Building and Construction Minister Nick Smith has said the Government's objective is to see house price inflation in single digits.

Little said even if that did happen this year it would be no success story for the Government.

"Not when for a young couple trying to get their first home, they are still looking at a deposit of anywhere between $140,000 and $200,000. It is just crazy stuff. The price increases might slow down but there is still a shortage of housing. The market is still desperately under-supplied.


"And we still have speculators in the market. It is still a market for investors as opposed to owner-occupiers."

But he did not want to see price drops. The Reserve Bank's former governor Don Brash has called for prices to be cut by 60 per cent and former chairman Arthur Grimes said they should fall by 40 per cent.

Little has said that, if in power, Labour would aim to stabilise but not cut prices. This would be achieved by building 100,000 affordable homes at a fixed price, and by banning non-resident purchases.

"You don't need to have a plan for prices to fall. You need to have a plan for more houses...and you need to get the speculators out of the market," he said.

In July, Green Party co-leader Metiria Turei was the first party leader to explicitly call for a fall in house prices, saying she wants to see house prices fall by 50 per cent over 10 to 15 years.

Little responded by saying he disagreed with that approach and it wouldn't be happening under a Labour Government.

Labour and the Greens have signed a formal Memorandum or Understanding to work together until the election.