Green Party MP Chlöe Swarbrick is urging for more intervention in housing affordability outside of tinkering from the Reserve Bank.
This week, Finance Minister Grant Robertson said the Reserve Bank would start consulting on reducing low deposit lending by banks to no more than 10 percent of their total lending from the current 20 percent.
The government has also given bank approval for debt-to-income ratios or interest rate floors, to ensure borrowers can afford to service mortgages.
But there are concerns the changes would negatively impact first home buyers
Swarbrick said there is a lot of emphasis on what kind of housing market is sustainable, but sustainability and affordability are different things.
"If you have for example an economy of 100 people who own 100 homes with mortgages that they can service, that's counted as financially sustainable, and you'd argue it must have been affordable too.
But if you've got that same starting point but one person owns 100 houses, with mortgages that they can service, and the other 99 cannot afford those homes, that is still technically sustainable.
"Sustainably unaffordable, and I think that's the problem."
She pointed to options like direct economic stimulus from the government, in the former of income support, to help ease the burden, as well as ending interest only mortgages.
"Half of the lending of landlords in this country is interest only. A third of new mortgage lending is interest only. If that were to be tackled, we would be doing a whole lot more than what was announced yesterday."
