Thousands of state houses could be put on the market despite the Government earlier ruling out selling off more state assets after this year's general election.

Social Housing Minister Paula Bennett told TV3's The Nation today that while thousands of houses could be sold, Housing New Zealand would remain the dominant force in providing social housing for the country.

"Even if we were to sell a few thousand so that we could either build more or go into partnership with community housing providers and private developers.

"Our intention is for people who need housing support to have more stock available. We just may not own it."

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The Government was still working through the details, but in some areas local iwi would have first right of refusal on the homes, Ms Bennett said.

"We have an obligation to go to iwi first in many cases, so, you know, there is a requirement for us to go out there and consult with them.

"So you will see us making a big consultation process over the next few months, where we're equally talking to community housing providers and others about what might happen."

Ms Bennett said the sale of state houses was an asset sale and the billion dollars the Government would receive from the sales would be spent on people "that need it in a much better way".

"This is not a big asset sale, and we've stuck with what the Prime Minister said."

"He said there will always be some common sense stuff that's happening at the margins of farms and others, and in this case a few state houses.

"So we are not going out there and doing anything en masse that is going to be of major concern to New Zealanders."

In February Prime Minister John Key said the National Government's flagship partial asset sales policy would end with the sale of Genesis Energy in March because there was not much else worth selling.

Labour Party's acting deputy leader Annette King said it was duplicitous for National to say the state housing sales were anything other than an asset sale.

"The Housing NZ portfolio is worth $15.1 billion and is described in official documents as the Government's second largest asset.

"Certainly there is nothing wrong with selling some houses that are not fit for purpose if more are going to be built, but selling up to 20,000 homes to private providers is a whole-sale sell down however Ms Bennett and Mr Key try to spin it."

The Government had not said whether money from the houses would be re-invested in the sector, Ms King said.

"People are living in cars and garages and in caravans in camping grounds. The Government doesn't have a mandate for this asset sale."

John Key's asset sales outed by his own Minister

Green Party Housing spokesman Kevin Hague said New Zealanders were not told asset sales were on the cards before the election.

"To make things worse, Paula Bennett said there is no guarantee the proceeds will go into funding new state housing.

"This goes to show this is just about asset sales and not about improving the lives of the many New Zealanders who desperately need homes."

It was "implausible" to think the Government did not have asset sales on their mind before the election., Mr Hague said.

"There is a real housing crisis in New Zealand and the Government needs to fix this as opposed to just selling off more of our valuable assets."