Prime Minister Jacinda Ardern says today's highly anticipated housing announcement will "tilt the balance" of the housing market towards first-home buyers.
But she has also sounded a warning to property investors – saying the package will help "curb rampant speculation".
Ardern, alongside Housing Minister Megan Woods, Finance Minister Grant Robertson and Revenue Minister David Parker, will this morning unveil details of the first tranche of the Government's housing plan.
Speaking to reporters on Monday, Ardern outlined a number of issues within New Zealand's housing market.
House prices, she said, are rising much faster than wages which means homes continue to climb out of reach for many first-home buyers.
The New Zealand housing market has become the least affordable in the OECD and property investors now make up the biggest share of buyers in the market, she told reporters.
But Ardern has warned not to expect a "silver bullet" as there is no one way to fix the issues in the housing market.
"But there are things we can do," she said, adding that the Government's plan would "start to make a real difference to this complex problem".
That problem has been exacerbated because of Covid-19 and the ways officials have attempted to cushion the economic blow.
For example, lower interest rates have pushed house prices up.
According to the Real Estate Institute of New Zealand, median house prices across the country increase by 14.3 per cent in the year to February, 2020.
That number was 21.5 per cent over the same period in 2021.
Asked about this number last week, Ardern said: "We don't want to continue to see the exorbitant house price growth that we have seen across the country in the last few months."
She said that today's announcement will impact the supply and demand side of the housing issue.
"The package will include steps to increase the supply of houses and improve affordability for home buyers and renters.
"Our aim is to tip the balance away from property investors towards first-home buyers and curb rampant speculation."
She didn't give away specifics, telling reporters to wait until today.
But in the past, Ardern has revealed the Government was looking into adjusting the thresholds around the home-start grants to make it easier for first-time buyers to get into the market.
The home-start grant enables first-time buyers access to $5000, or $10,000 as a couple, towards their first property.
There are a number of restrictions at the moment – including an earning limit of $85,000 per person, or $130,000 for a couple.
There is also speculation by economists and tax experts that the Government will announce an extension of the bright-line test as well.
The bright-line test is similar to a capital gains tax (CGT) on housing. It means people have to pay tax on any gains on property if it's sold within five years.
There are, however, a number of exceptions – such as an exemption for a family home.
Former top Reserve Bank official, now independent economist, Michael Reddell, said an extension of the bright-line test is "almost a done deal".