The Government is going to build houses in Auckland on Housing New Zealand land.

The Government is preparing to build tens of thousands of houses for private sale in Auckland as it tries to tackle the city's housing crisis, Finance Minister Bill English says.

However, English has rebuffed suggestions the plans are a retread of Labour's policy for a government-backed building programme, saying the Government has spent years working on the developments.

The Government has been pushed to become more hands-on in the Auckland housing market, with average house prices in the city recently passing the $1 million mark.

CHRIS MCKEEN Finance Minister Bill English says the number of affordable houses will be decided "development by development".

English said the Government was set to become a significant supplier of medium-density housing in Auckland in coming years, working on large-scale redevelopments of Housing New Zealand land.

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The projects would be similar to the Northcote development announced last month, where 300 existing Housing NZ properties will be turned into 1200 new homes, with as many as two-thirds being sold to the private sector.

CHARLOTTE CURD/FAIRFAX NZ Labour housing spokesman Phil Twyford says the Government's plans do not go far enough to help first home buyers.

English said the Auckland Council's new Unitary Plan would allow the Government to build 30,000 or more houses in the city, more than 10 times the previous figure, and it would be "silly not to do that when there's strong demand".

The number of affordable houses would be decided "development by development", but the Government was committed to building more social and affordable housing to meet demand.

"The Government's not going to be trying to make the most money it possibly can - we'll be aiming to be a provider of medium and affordable housing into the Auckland market."

The announcement appears similar to Labour's KiwiBuild programme, a government-backed scheme to build 100,000 affordable homes around New Zealand over a decade, which has been criticised by the Government.

'ON THIS TRACK FOR YEARS'

Asked whether the house-building programme was essentially "KiwiBuild light", English claimed Labour's policy was "all about setting up government departments to do things it can't do", and the Government had been working on development plans for years.

"We've been on this track for two or three years ... opposition can say what they like, government actually has to do things, so our focus has actually been getting on with shaping large-scale developments."

Labour housing spokesman Phil Twyford described the Government's plans as "KiwiBuild ultra ultra ultra light", saying it was farcical that it had been so critical of Labour's own proposals.

"These guys are so humiliated by the abject failure of their housing policy to deliver actual houses that people can live in that they've now had to do an embarrassing U-turn - what Bill English is talking about is a government-backed building programme."

However, Twyford said the Government's work lacked the level of scale and ambition to tackle the housing crisis, while there were no safeguards to ensure the houses would be affordable or earmarked for first home buyers.

"If you don't do that, you see what we've seen in Hobsonville, that is huge publicly owned assets being converted to private ownership, and half of those houses are being snapped up by speculators.

"How does that help the situation? How does that help desperate Kiwi families who just want to get a home of their own?"