Housing New Zealand Corporation sold 174 properties nationally in the past year for a total of $42.2 million.
The Government agency got the biggest windfalls from high-priced Auckland sales, where 11 houses yielded $9 million.
Sean Bignell, the general manager of asset development, said the corporation had a policy of selling high-value properties, expected to fetch more than $700,000.
That money was then reinvested into housing for those most in need, he said.
Housing NZ sold 39 Spencer St, Remuera (valued at $770,000), for $1.3 million and 58 Wainui Ave, Pt Chevalier (valued at $740,000), for $850,000.
Both sold for more than expected and were in desirable areas but are now in private hands, expected to be either removed or redeveloped.
Mr Bignell said the value of the corporation's expensive properties was in the land, not the houses.
"Where Housing NZ has identified high value properties, it will consider a range of asset management options which include retain as is, redevelop the site, and/or dispose and reinvest in more appropriate housing.
"The corporation also has a strategy to sell state houses in areas with low demand and to invest the proceeds of sales in acquiring housing in areas of high demand.
"In addition, the corporation is selling homes of the wrong size in high demand areas and is replacing them with homes of the right size," Mr Bignell said.
The 174 sales were made between last July and April 30 this year and 11 Auckland properties sold for a combined total of $9 million.
"All of the money made from these sales is reinvested into acquiring and improving state housing.
"It is expected that the total number of state houses will remain relatively constant over the next three to five years, with a focus on ensuring state houses of the right size, right type, and right quality are located in areas of highest demand," Mr Bignell said.
By the end of last month, Housing New Zealand managed 69,515 state rental properties, he said.
Sales included the state selling vacant properties, selling to tenants and inter-company property transfers.