Finance Minister Bill English expects retirement village type operators will provide social housing in New Zealand in the coming years.

Fully private, sharemarket-listed companies could provide social housing in return for guaranteed subsidies within five years, Bill English has told fund managers.

The Finance Minister also claimed the cost of social housing provision at a development in Tamaki was $900, per person, per week, or $46,800 a year, a hint of the scale of subsidy which could be on offer.

The Government is looking to reform the way it provides social housing, and so far English has indicated the provision would come from charities already in the sector, possibly alongside investment capital from the private sector.

Simon Edwards The $120 million Ryman 'Bob Scott Retirement Village' being constructed on the former Petone College site. It will eventually be home to 420 residents. The company has been an NZX darling, developing dozens of villages around New Zealand.

But on Monday evening English appeared to go further, telling an audience of financial market experts that companies akin to retirement village developers Ryman and Summerset - fully private sharemarket listed companies - could step into the space.

READ MORE: Government announces over 500 new social housing properties in Auckland

BEN HILL Labour housing spokesman Phil Twyford said comparisons between the lucrative retirement village market and social housing were "idiotic".

Speaking at the opening of the new Harbour Asset Management offices in central Wellington, English said social housing could be the next retirement village sector, where in some cases investors have seen huge returns.

"One opportunity, I think it will take about five years to get there, is something a bit analogous to your rest home operators in the social housing market," English said.

Work was underway to turn the social housing stock into "something that looks a bit more recognisable to managers of capital. That is, contractual cash flows, such as the existing rest home market," English said.

"You've seen people build serious businesses, very successful listed businesses, off the back of what used to be a very dysfunctional publicly provided service, that is, rest home beds."

Reforms of social housing were aiming to establish the "real cost of social housing, or to put it around the other way, the kind of subsidies that government offers which suppliers of capital could access.

"We're building houses in Tamaki, [a] pretty desirable location in Auckland, and the subsidy you are providing to a person living in a state house there is $900 a week, to make sure they pay only 25 per cent of their income as rent," English said.

"So they pay 90 bucks and we pay the other $900, when you take into account the cost of capital that any provider of capital would expect to be recovering."

English said applying "basic capital management" disciplines revealed "amazing" things about the business of government.

Harbour Asset Management managing director Andrew Bascand said the example of NZX-listed retirement village providers Ryman and Summerset showed successful businesses could be built while reducing pressure on the government to provide certain social services.

"Imagine if we didn't have Ryman and Summerset. The burden of care on the government would be unbelievable."

Bascand supported trialling private sector models "at the margin" of social housing, noting that the private sector provided a relatively small part of the entire retirement care market.

"Absolutely [with fully private provision]. Why don't we do an out and out complete private [model], a different PPP [public private partnership] project, and then one where the government asks the private sector to do the development and then takes over again?"

English's comments had sparked discussion among financial market participants on Tuesday morning, Bascand said, "about what we can offer" however no clear answers had been formed, as social housing was quite a different service to retirement care.

Labour's social housing spokesman Phil Twyford said the comparison with the listed retirement sector was "idiotic" because Ryman and Summerset targeted wealthier New Zealanders. Such wealth simply did not exist among those requiring social housing, who were the most vulnerable New Zealanders.

Twyford said English's statements over two years had hinted at private provision, but had generally been made under the guise that local registered charities would be central to the plan.

"They've tried to dress it up along the way...That local people would understand the needs of tenants better than bureaucrats in Wellington, all that sort of spin.

"It's just a smokescreen. They want to get the government out of providing houses, they want private landlords to do it."

The only way to make the model work in the private market was to offer subsidies "like there's no tomorrow", Twyford said.