The housing market is so unaffordable that even if house prices fell 20 percent, about three-quarters of renters still could not afford to get their foot on the ladder.
The sobering information came out of official documents released on Thursday, also showing that the Government ignored advice that their housing policy could drive rents up.
The official information paints a grim outlook for Rotorua's housing market. As Visions of a Helping Hand chief executive Tiny Deane points out, families can barely afford to live there.
"A two bedroom is $420 to $450, a three bedroom is $550 to $600 and then you're up to $700 for a four bedroom house - and that's just unaffordable for any family on a benefit for any family that's working," he told Newshub.
In just six years house prices have more than doubled in Rotorua, increasing 137 percent. The knock-on effects forcing whānau from their homes and into emergency accommodation.
"The motels aren't the best for any mum or dads bringing up their kids," says Deane.
Not enough houses are getting built in Rotorua - a problem we're seeing nationwide. It's something the Government aims to fix with its housing policy package announced last month.
But official advice released on Thursday shows ministers ignored warnings that policy could lead to an increase in rents, impacting on child wellbeing and child poverty.
Housing Minister Megan Woods asked for advice on stopping rent increases, but Treasury said no way because it's ineffective.
"The significant house price growth we have seen, we haven't seen translated in the same way to the rental market, but it is something we're keeping a very close eye on," says Prime Minister Jacinda Ardern.
Ministers were also warned increasing the house price caps for First Home Grants would likely push prices up further, helping the already rich but hurting first-home buyers - not really the Government's plan, but they did increase the caps anyway.
"For us it was about making those decisions that would tilt housing towards first-home buyers and away from what we were seeing in the data, which was an exponential increase of investors in the market," Ardern said.
To cool investor demand the Government also added to investors' tax bill. The objective was to reduce "expectations of significant future house price gains".
Infometrics senior economist Brad Olsen says the Government has sent a message to investors.
"I think the Government's put investors on notice that there aren't these golden locked in returns anymore and the investors do need to be aware that house prices could go down," he told Newshub.
Olsen says that's what needs to happen for more first-home buyers to get into the market.
The official Government advice saying even if house prices fell 20 percent, at least three-quarters of renters would still be unable to buy a house.
"A lot of people out there who do want to get into the market just simply don't have the money to make these incredible deposit requirements," says Olsen. "The housing package doesn't change that."
There's a whole lot in the documents that's been redacted or not yet adopted, so last month's housing package may not be the end of the Government's intervention in the housing market.