The Prime Minister says a capital gains tax isn't the answer to the country's soaring house prices.

A North Shore house in Auckland has earned its owner nearly $1000 a week.

It was bought for $750,000 in 2013 and has just sold for $1.2 million.

Prime Minister John Key says it's not a new thing for Auckland. He points out house prices doubled under the previous government.

"Obviously Auckland house prices are rising, but the Government is focused very heavily on the supply side. As you saw from the Reserve Bank this week they don't have the single silver bullet."

John Key argues around the world, capital gains taxes have proven to be highly inefficient.

"I don't think a capital gains tax works. That doesn't mean that the reserve bank can't come up with...other alternatives."