A capital gains tax is being described as a band aid solution for the housing market.

The Reserve Bank says it could stop the bubble bursting.

Prime Minister John Key thinks it isn't the answer to the country's soaring house prices.

Auckland Property Investors’ Association President Andrew Bruce believes it would not address the real issue in the nation's biggest city, which is a shortage of housing.

"To my way of thinking if you actually really want to resolve the issue you've got to try to make places more developer friendly and actually encourage building."

Bruce says it's reasonably well accepted that there is quite shortage of houses at the moment.

"When you've got a shortage of supply and a big demand, that's sort of economics 101. You're going to have some price rises."

He argues if there was an oversupply of 20,000 houses rather than an undersupply of the same number, we'd be having a very different conversation.