The government will not conduct a wholesale review of its migration policy in a bid to cool the housing market, despite the Reserve Bank saying it's what's needed.
The prime minister has urged the Reserve Bank to rein in Auckland property investors.
The central bank is looking at a suite of tools to help tackle the surging market and has indicated it may tighten lending rules on property investors, but possibly not until the end of the year.
House prices are increasing at 13 percent per annum nationally, and at 15 to 20 percent in Auckland and close-by regions.
In a speech yesterday the Bank's deputy governor Grant Spencer said that evidence from housing cycles in several advanced economies suggested the longer this continues, the more likely there will be a severe correction.
Speaking to Morning Report, Mr Spencer said there had been an inflow of 160,000 people in the past three years, and migration was an important driver of the housing situation that could not be ignored.
"You can't manage or fine tune the migration cycle, we know that, but all we're saying is that given it's an important driver that we should be taking a look at that policy - making sure that we're getting the numbers and the skills that government's really targeting."
But Economic Development Minister Steven Joyce told Morning Report the government would not conduct a wholesale review of its migration policy.
He said the government was constantly reviewing the policy but no major changes were needed.
"Migration contributes to demand and most of that migration, as acknowledged by the deputy governor of the Reserve Bank, is about kiwis not leaving and returning home, and that is really big."
Mr Joyce echoed earlier comments from the Prime Minister that the Reserve Bank should move quickly on any change affecting the housing market, to avoid exacerbating the problem.
Former Reserve Bank governor Don Brash said it was not the Reserve Bank's responsibility to control Auckland's house prices and that responsibility lies with local and central government.