Economic liberalisation of the economy in the 1980s the New Zealand housing market has undergone significant transformations. Since the early 1990s home ownership in New Zealand has been in decline and the role of the private rental market has become increasingly significant, particularly in the Auckland region. Rapid house price inflation post-2000 has adversely affected first-time buyers and there is evidence that the traditional ëtransitionalí role of the private rental market is changing, as the rental market increasingly incorporates older and wealthier households. This paper examines issues relating to house prices and housing affordability in Auckland and reflects on the long term economic and policy implications of the rising importance of the private rental market in the housing system.