He also left the door open to allowing first home buyers to raid their superannuation to fund a deposit, and said further tightening on regulations for foreign investors had "his very close attention".

Speaking ahead of an agenda-setting address on housing affordability on Monday, Mr Morrison ruled out changes to negative gearing and labelled Labor's plans to cut negative gearing "cruel".

"Negative gearing has been around for a century. It's an established structural component of Australia's housing market; if they are going to pull the rug out, who is going to put a roof over people's head," he told ABC Radio.

Negative gearing allows property investors to reduce the tax they pay on other income if they make a loss. Up to 60 per cent of Australia's 2 million landlords make a loss each financial year, with an average loss of $10,000.

Mr Morrison described "the chainsaw approach" of hacking into negative gearing as "reckless".

"But frankly I think it is cruel because it is saying to people in Sydney and Melbourne who are losing hope, 'you can change a tax and you can buy a house'," he said.

"This is a comprehensive problem, you can't expect results overnight."

Shadow treasurer Chris Bowen accused Mr Morrison and Prime Minister Malcolm Turnbull of being negligent on housing affordability.

"Negative gearing reform had to be an essential part of the mix," he said.

"Any housing affordability plan which doesn't involve reform to negative gearing is a sham."

Mr Morrison commended the work of former NSW Planning Minister Rob Stokes, who recently assessed how many empty bedrooms were spread out through Sydney suburbs.

This, it said, was equivalent to 20 years of housing supply.

Mr Morrison said these were "reasonable issues to address, because downsizing frees up housing supply."

In October, the NSW Department of Planning and Environment found more than half a million homes, most of which are occupied by "empty nester" older couples or singles in their 50s and older, had at least two empty bedrooms.

He also signalled tighter controls on foreign investors in the wake of figures that show more overseas investors than first home-buyers entered the market in the September quarter last year.

"I think it is a big issue with latent stock sitting out in the market," Mr Morrison said.

"We have tightened up the rules and increased the fees; it's a big part of the issue, it is an area that has my very close attention,"

The Treasurer also left the door open to first home buyers being allowed to access their superannuation to contribute to a home deposit.

"The issue is that the more and more people [are] going into retirement who have larger mortgages, who don't own their own homes," he said.

"One of the reasons why home ownership is such a positive is that people who go into retirement when they own their own home are in a much stronger position.

"People owning their own home is a good thing for the economy, and we need to do as much as we can to achieve this," he said.

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