Housing Minister Phil Twyford received a warning from officials last year about the potential downside of his proposed housing 'super-agency'. (File photo)

Officials have warned Housing Minister Phil Twyford that property rights could be eroded by the all-powerful land agency he wants to create.

Land owners whose land is deemed necessary for housing could be forced into exchanging their property for shares or money by the proposed new Housing and Urban Development Authority (UDA).

Property Institute chief executive Ashley Church said he had received documents that showed Twyford's own housing officials had advised him last year that giving the new agency land acquisition powers could undermine property rights across the board.

They delivered the advice after a presentation about proposals for the new agency in November.

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The presentation outlined a sprawling vision for the proposed Housing and Urban Development Authority, which would combine KiwiBuild, the Hobsonville Land company and Housing New Zealand under one roof.

STUFF The Government's proposed Urban Development Authority could have the power to force land owners to exchange their land for shares or money, if the agency deems the land necessary for housing. (File photo)

But Church said it was the combination of powers the agency would have, including shortened consultation periods around land acquisition, that would see it exercise the power more frequently than any other government agency had done in recent times.

"At the moment it takes years to acquire land. That's why things like [the] Transmission Gully [motorway] and the Waterview tunnel took so long," he said.

"This, you're talking months, a year at the outside, and it's a very quick process designed to pay lip service to consultation while basically steam-rolling these things through really, really quickly."

The new agency would also have the ability to authorise stormwater and sewerage infrastructure overriding local district plans, something Church said would undermine local democracy.

A spokeswoman for Twyford said there was nothing new in the UDA's power to acquire land, which had already been well signalled in public statements.

Twyford told Newshub that he expected compulsory aquisition of properties for housing to be the exception rather than the rule.

In a statement, the ACT party said secure property rights were fundamental to a healthy, functioning economy.

"New Zealanders need to have confidence that their ownership of property is secure if they are to use it productively. The Government’s Urban Development Authority will severely undermine that confidence.”