Dunedin is on the verge of a crisis as house prices skyrocket to nearly six times the average salary, hitting those at the lower end of the economic scale the hardest.

In its final report, the Mayor's Taskforce for Housing has laid out the increasing cost of housing in the city and what needs to be done to stop the situation becoming a full-blown crisis.

Made up of members from the Dunedin City Council, the University of Otago, the real estate industry, housing providers and charitable organisations, the task force was established last year to provide recommendations to meet the city's long and short-term housing needs.

What started out with a focus on housing quality quickly spread to cover the increasing cost and shortage of housing in the city.

House prices in Dunedin have skyrocketed. Photo: ODT Files

Information collected by the task force showed the median house price was now 5.7 times the median household income, which meant the city was officially considered unaffordable by some international measures.

Supply had not kept up with demand and an increasing population meant both house and rental prices had risen accordingly.

Compounding the situation was the poor quality of the city's older - particularly rental - accommodation.

The report recommends 16 action points that it says will ensure affordable and accessible healthy homes for Dunedin residents.

Salvation Army community ministries manager and task force member David McKenzie said the situation was worse than the official figures showed and the city was in the middle of a crisis.

Families approached the Salvation Army and other agencies every day for housing assistance and many were not captured by the council's or the Government's official statistics, Mr McKenzie said.

The report was just the first phase in improving the city's housing but there needed to be action immediately, he said.

"There are people with land and there are people out there with philanthropic intentions and we're not just about the big bucks, and it's about pulling all that together."

The city also needed to convince the Government and other national organisations it was no longer a sleepy little town and those discussions had started, Mr McKenzie said.

First-time home buyer Tamsyn Park said she and her partner had been looking to buy a house for about six weeks but had found it difficult to compete with the sheer number of other potential buyers.

Making their situation more difficult was the need to find a home within their $400,000 budget that was warm and healthy enough for her son - who is in remission from cancer - to live in.

"We needed builders to view before putting in an offer because we can't take any risks. This has meant we have missed out on a few homes by needing to work in with the homeowners and builders," she said.

To fit within their budget, they had had to reconsider the type of home they would buy.

"We have had to change a few things, homes without all the luxuries like garaging and new bathrooms and kitchens. If the home is warm and sunny, that takes priority."

Task force chairman Cr Aaron Hawkins would not go so far as to say the city had a housing crisis but said if an urgent effort was not made to address the problem, it would become too difficult to solve.

The task force's recommendations to the Dunedin City Council broadly fit into three categories: advocacy, facilitation and those problems the council had the power to directly address, such as investigating the use of public land for affordable housing.

It was urgent the council and others acted quickly, particularly as some of the issues would take years to address, Cr Hawkins said.

Issues:

Median house prices 5.7 times the median household income.

times the median household income. 440 households experiencing high housing stress (incl. overcrowding, homelessness).

households experiencing high housing stress (incl. overcrowding, homelessness). Only 55 new social housing places funded for next four years.

new social housing places funded for next four years. More than 400 households on community and social housing waiting list.

households on community and social housing waiting list. Unknown number of people unable to enter housing market.

Recommendations to DCC: