Auckland suburbs

PHOTO: Auckland’s median house price reaches $1 million 

A major tax reform is needed to help solve New Zealand’s overheated housing market, according to one chief economist.

It comes as Auckland’s median house price reaches $1 million and median prices across the country are up by almost 20 percent.

Westpac chief economist Dominick Stephens also believes a capital gains tax is the best way to solve this problem.

“I think the best solution is tax reform,” Stephens said.

But his preference of a capital gains tax has been ruled out by the Government, with Prime Minister Jacinda Ardern saying “other solutions” are being considered. However, those other solutions won’t be another form of major tax change like a land or wealth tax, she added.

Stephens said as more people are locked out of the housing market, they’ll end up demanding tax change.