Winston Peters' cheap housing plan dismissed as unsatisfactory

The Government's ambitious plan to make houses cheaper is being labelled as unsatisfactory.

Acting Prime Minister Winston Peters wants to see house prices no higher than five times the living wage. The living wage works out at around $42,000 a year.

The average New Zealand house price would have to be $213,720 - it's currently $677,966 - and the annual wage will have to go up to $135,593 to allow that to happen.

However economist Shamubeel Eaqub says it will take too long and the Government has its priorities wrong.

"In terms of doing it relative to the living wage, is not going to give us a satisfactory outcome, because it won't be fast enough," he says.

"What we need is far more ambition and scale in the kinds of policies we are pursuing, especially around building more houses."

Mr Peters says his plans are a long term target.

"Some time in the distant future that might be a fact, but not now," Mr Peters said of the possibility of a living wage of $100 an hour.

"It'll take a while, we can't do it overnight."

If you apply Mr Peters' plans to Auckland, house prices would need to fall by 80 percent ($213,720), or the living wage go up to $210,945 a year - $101 an hour.

Mr Eaqub dismisses Mr Peters' plans as unrealistic.

"If we want wages to catch up with house prices, we'd have to wait until 2057," he argues.

"Or we could have a $250,000 drop in house prices."