Housing Minister Phil Twyford has admitted KiwiBuild will fall drastically short of its first-year target, delivering just 300 homes by July 1.

Twyford made this admission to Stuff after telling RNZ on Wednesday morning he "couldn't guarantee" the first target.

Twyford said 300 houses were due to be completed by July 1 but he was working hard to increase that number - yet meeting the target of 1000 homes by July 1 was not possible.

"It's clear now that we won't meet our first year target, and that's a real disappointment to me," Twyford said.

"It's been tougher than we expected for the first year."

Twyford said the employment dispute with KiwiBuild head Stephen Barclay was "not helpful" through the "critical early months." But he didn't go as far as to blame Barclay or the dispute for the missed target.

He said the Government were finding it harder to change the behaviour of developers through the Buying Off The Plans scheme than they had anticipated.

"It's been more difficult than we expected to really shift developers off their existing business model which is about getting a return on capital from small numbers of mid to high end homes. We are wanting them to build more modest lower quartile homes."

That Buying Off The Plans scheme was intended to make up the bulk of the new builds while the Urban Development Authority - a Government mega-developer that can build new suburbs - is set up.

KiwiBuild is the Government's flagship housing policy, a promise to build 100,000 affordable homes over the next ten years.

The homes have a $650,000 price cap inside Auckland and Queenstown and a $500,000 price cap in other areas of the country.

The 1000 homes target was set to be followed by 5000 homes the following year then 10,000 the year after that.

Twyford said he wasn't focused on those further targets at this point as he was going "hell for leather" getting the policy up and running.

"We're totally committed to the policy. We're six months into a ten year program," Twyford said.

"We set very ambitious targets. But we always said it would be a ramp-up."

He had talked to the Prime Minister about the target and she still had total confidence in his ability to hold the housing portfolio.

National Party housing spokeswoman Judith Collins said that if the Prime Minister really did still have confidence in Twyford it must be because the pool of talent in Labour is so low there is nobody to replace him.

"He clearly cannot do the job. He's been a minister since November of 2017 and delivered 33 homes - in that same time the private sector has built 35200," Collins said.

"He's got no excuse because he had this portfolio in opposition for over six years. He should have worked out how hard it is to have interventions in the property market."

Collins said developers she had spoken to treated Twyford with "bemusement" and the government officials sent to set up KiwiBuild Buying Off The Plans schemes were "total novices."

"The total lack of work done by Labour in housing in opposition other than throwing stones at National is showing."

She said Ardern had to get someone in the portfolio who cold "brutally" fix it up.

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