The vast majority of the houses the government is promising to build for sale in Auckland over the next decade will have price tags of well over $650,000.

Photo: RNZ / Claire Eastham-Farrelly

Opposition parties described the policy as "embarrassing" and said it offered little hope to first-home buyers.

The government yesterday announced it would build 34,000 houses in Auckland over the next ten years.

However, it said just 13,500 of those would be state and social houses, to replace 8300 being demolished.

The remaining 20,600 would be sold privately.

Of those, roughly 20 percent - about 4300 houses - would be classed as affordable. The rest would be sold at market value.

The government defines "affordable" in Auckland as less than $650,000.

Labour Party leader Andrew Little said the announcement was "smoke and mirrors" from the National government.

"It's just sadly embarrassing. Nine years into this government, they've denied there's a housing crisis.

Photo: RNZ / Craig McCulloch

"Four months out from an election, they're desperate to look like they're doing something ... it's not credible."

He said Labour would build 50,000 homes in Auckland over ten years as part of its KiwiBuild policy - every one less than $600,000.

"I really wished they'd just stolen our policy and then called it theirs. That would be more flattering," he said.

Green Party co-leader James Shaw said the policy "doesn't offer a lot of hope for first home buyers".

"It's another political election year announcement that is designed to make it look as if the National government is solving the problem when actually it isn't."

Social Housing Minister Amy Adams defended the breakdown and said the market would not work if all the houses were affordable.

"It's really important we don't create social housing suburbs. It's not what good urban design tells us is the right thing to do."

She said a mix of social, affordable and market value properties "makes the best communities".

But the housing charity Habitat for Humanity said even the so-called "affordable" properties would be well out of reach for most people.

Its Auckland executive director, Conrad LaPointe, said people struggling to buy a house would feel "discouraged" by the announcement.

Much more done needed to be done to help them, he said.

Photo: VNP / Phil Smith

ACT Party leader David Seymour said the government should cut red tape so private developers could build the houses, rather than Housing New Zealand.

He said National would be judged "extremely harshly in the history books" for cynically denying the housing crisis and then doing too little, too late to try fix it.

The government's plan will cost about $2.23 billion for the first four years, funded out of Housing New Zealand's existing budget and $1.1bn of new borrowing.

The last six years will be funded by the houses sold on the market and rental returns.