Kiwi house prices are the highest in the world compared to incomes, Fitch says.

New Zealand has been described as the most expensive country in the world to buy property by a global ratings agency.

Fitch has released its global housing and mortgage outlook report for this year and rates New Zealand's houses as the priciest compared to incomes.

The Property Council said it reinforced the need for action.

Chief executive Connal Townsend said the 14 per cent annual price growth reported by the Real Estate Institute in 2015 was a damning indictment on the country's housing market.

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"This is extremely concerning to us. We have a planning system in crisis with excessive restrictions on development which are hampering delivery efforts. Add to that burdening regulations and a construction sector unable to meet new housing demand, and we are fast approaching the point of no return."

He said if the situation continued, Auckland housing would become unattainable for the average New Zealand family.

"With Auckland's population projected to explode, high regulatory costs and restrictions and a lack of cohesive integration between our three planning laws, it's no wonder we're doing terribly. But this isn't just an Auckland issue," he said.

"According to QV New Zealand, house prices are increasing in growth cities like Whangarei, Tauranga, Hamilton and Wellington at a rate higher than average salary increases. The average house price in Tauranga has increased by more than 18 per cent over the last year."

He said even apartments were starting to sell at prices that were out of reach for a typical buyer.

Property commentator Olly Newland said Auckland house prices were unsustainable and should not rise any further.

But he said if Auckland's price movement were taken out of the calculations, New Zealand would not be expensive by international standards.

Fitch said it expected 4 per cent growth in house prices this year, driven by a shortage of affordable housing in Auckland.

It said that would be offset by restrictions on low-deposit lending by the Reserve Bank and rising unaffordability for owner occupiers. In regions outside Auckland, Fitch expects low-to-static growth in house prices, due to weakened economic activity as a result of falling dairy prices.