Freestanding four and five bedroom homes have been popular at the Addison development in Takanini.

Four and five-bedroom houses are taking over the property market at the expense of three-bedroom homes.

Auckland Council says planning rules are encouraging people to build larger homes when what is needed is developments of smaller units.

As the city struggles with a housing shortage, the increase in the number of large freestanding homes is outstripping growth in more affordable dwellings, experts say.

It's a nationwide trend, with houses getting bigger even though the average household size remains steady at 2.7 people per home.

In Auckland the proportion of houses with four and five bedrooms has shot up in the last decade, from 25 per cent in 2001 to 31.4 per cent at the last census in 2013.

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Meanwhile the proportion of three-bedroom homes has fallen - from 46 per cent in 2001 to 41 per cent in 2013 - with the share of two-bedroom units also decreasing slightly.

Auckland's density regulations, which restrict how many units can be built on a section, force developers to construct large bespoke homes, Auckland Council chief economist Chris Parker said.

The land was expensive and it was the only way for them to maximise their investment, he said.

"The cumulative effect of that is that we're propping up the top half of the market with volume in new builds," Parker said.

"The key... is to open up the bottom half of the market, increase ability to build attached buildings near town centres."

This would then reduce the median house price, he said.

Auckland Council has proposed allowing more intensification under the city's new Unitary Plan, currently being formulated, particularly within a 10km radius of the CBD.

Shamubeel Eaqub, co-author of the book Generation Rent about the dream of home ownership fading for many Kiwis, said Auckland was a bit different from the rest of the country.

While New Zealand-wide the biggest growth in households was in one and two person households, in Auckland there was growth overall, he said.

This was because the city's population was relatively young, and its Maori and Pasifika communities tended to have larger families.

It meant there was increasing demand for both smaller and larger dwellings."It's kind of this bimodal distribution where you've got lots of growth in very small and very large size households," he said.

"The challenge is can we provide the kinds of houses that are necessary, and where in the market is (it) meeting the demand.

"Most of the demand that is being met tends to be the more affluent people who are able to afford those kinds of (larger) houses."

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Home builder New Dreamland Development, which is constructing the Addison development in Takanini, said most of its products were three- to four-bedroom homes.

"Within Addison, for example, the four-bedroom homes with the extra room at the back are extremely popular right now," general manager Amanda Minting Wen said.

"Three-bedroom homes are not as popular, because the buyer always wants more for their money.

"The additional rooms give buyers and investors options for what they can do with the extra space, which is always welcome," she said.

Development industry body the Property Council is holding its annual Residential Development Summit on Thursday, looking at the causes of Auckland's housing unaffordability.

Auckland needed a "dynamic legislative and regulatory environment" to meet the mounting challenges of housing shortages and escalating prices in a city where infrastructure development had been neglected for decades, environmental lawyer Sue Simons, who will speak at the summit, said.

"The property development industry also needs greater certainty surrounding Auckland Council's proposed Unitary Plan and land supply strategies," she said.