The Government says it's looking at putting the charges levied by Auckland's water company under closer scrutiny.
The council-owned Watercare Services this week announced it would charge an additional $2300 for each new home or apartment connecting to its network.
Housing Minister Nick Smith said the move was not helpful at a time when there was a focus on trying to make housing more affordable.
Watercare's move takes to $12,075 the fee it will charge for new connections. It is lower than the fee charged by some councils, but the company said it still covered only 30 percent of the cost of new infrastructure.
Dr Smith said work underway by his ministry and Treasury is looking at the charging practices of network companies which service new housing areas, including water and electricity and phone networks.
He said at present, the legislation governing Watercare Services meant it was outside the reach of local government law changes, bringing in new checks on how much can be charged for new developments.
Dr Smith said the work underway should be finished at the end of the year.
Auckland mayor Len Brown said he was comfortable about the latest charging increase by Watercare. He approves of the company's policy of moving to charging 80 percent of the real cost of growth-related infrastructure.
Watercare's latest increase takes it to a 30 percent recovery, meaning if the policy continues, the charge could nearly treble.
Mr Brown said the council does have political oversight of Watercare, and he hopes the Government will consult with it, if it intends to change the charging process.