Prime Minister Bill English says the Government will keep paying emergency housing grants to those who need them.

Prime Minister Bill English has downplayed a surge in demand for emergency housing grants, saying the government support is "flushing out" Kiwis in need of help.

The Government set up a special needs grant for emergency housing last year, following reports of a rise in homelessness.

However, while it planned to give out 1400 grants a year, 8860 grants were made in the last quarter of 2016 alone, Newshub reported.

The Ministry of Social Development (MSD) spent $7.7 million on the grants during the same period, well over the $2m budget.

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In a briefing to new Social Housing Minister Amy Adams, MSD said there had been a "higher than expected level of demand" for the emergency housing grants since they were announced.

"The high level of demand for emergency housing has seen higher than expected numbers of households being supported to stay in motels and other forms of commercial accommodation in the short-term.

MSD staff were given "further guidance" last November to deal with the flood of applications for assistance, the briefing said.

"The guidance focussed on ensuring that assistance was only granted to people with a genuine emergency need and that clear expectations for clients were set about what they must do as a condition of receiving the assistance."

English told The AM Show the grant appeared to be "flushing out people who are in difficult housing situations", and the Government would ensure they received the help they needed.

"It's a demand-led grant, so if people show up, they get it..,we'll just keep paying as people need it."

The Government had invested over $300m into emergency housing, but it would take time to reap the reward, he said.

"The fact is that we've got a fast growing population, everyone knows there's been pressure in the housing market - we're adapting pretty well to that.

"This is trying to deal with the real need that may have been hidden before, so it's now coming out but in the longer run, more houses on the ground is what's going to matter and more emergency housing."

English said the demand for emergency grants were not a sign that there was a housing crisis.

"I wouldn't call it a crisis. We have strong demand, we have an uplift in prices - these are good problems to have actually."