A political commentator says it's ridiculous that the Green-Labour alliance is divided on the most important topic of the year.

The Green Party's calling for a deflation, rather than a bursting of the property market bubble, and a sensible plan to reduce house prices over time by 50 percent.

But Labour's come out and said it wouldn't support such a move, and there's no 'conceivable mechanism' to do such a thing.

Political commentator Barry Gustafson said it tells voters that the two aren't talking, and are still far apart when it comes to policy making on important topics.

"They can differ about a number of issues, but they need to get their act together and have a common ground on the major half-dozen issues and housing affordability is right up there at the top."

He said the differing policies destroy any thought of an alternative government.

"If they can't agree on something as significant as this, then their chances of governing together in a harmonious way seem rather dim."

The New Zealand Institute of Economic Research says the Greens' idea would be a risky approach that could lead to falls in other areas of the economy.

Deputy Chief Executive John Ballingall said the housing market is sensitive to changes such as price caps, and it could make the market even more attractive to foreign buyers.

"If you're going to try and bring house prices down, that's going to erode existing homeowners' equity - that could lead to a big call in confidence, could lead to less investment, less spending, more existing home owners going into financial distress."

Ballingall said what he'd like to see is more emphasis on ideas to lift average household incomes instead.

He said he admires the effort to have an open and frank discussion, but the finer details wouldn't be so great.

"Unlike houses, talk is cheap, and we need to see the details of the policy. At this stage, it's very difficult to see how house prices could be brought down in a managed way without causing some pretty significant trade-offs in the other parts of the economy."