Fears about foreign buyers are misguided when it comes to what's fuelling the housing crisis, and we need to look closer to home.

Data from Land Information New Zealand shows just three percent of house sales go to foreigners, with a further 50 percent to investors register in New Zealand.

Andrew Dickens: Only supply can solve housing crisis

Economist Shamubeel Eaqub told Andrew Dickens a raise in LVRs won 't work - and will continue to push the problem to other places - and we need to look at the fundamental problem.

"We've got a problem in terms of the way we treat housing in New Zealand - much more as an investment rather than a home. That's facilitated to our tax laws which are very favoured towards housing, and banking laws which allow lots of borrowing."

Eaqub said while the data is limited, it does suggest that we need to look closer to home to solve the crisis.

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He said Finance Minister Bill English's hint yesterday that further land could be released for development is not enough.

"We're talking about house prices that are 10 times average household incomes. This is a crisis, and we've been fiddling while Rome burns. Every step we've taken so far has been as little as possible in reaction to the pressures that have been there in the public."

Shamubeel Eaqub said we also need to get on top of council processes and infrastructure funding to build more houses.