Prime Minister Jacinda Ardern is playing down news that the Government's flagship KiwiBuild programme will fall well short of its target of 1000 houses built in the first year.

"Ultimately, the true goal has been to address the housing issues we have in New Zealand and that includes state housing, that includes community housing, that includes addressing homelessness, and it includes affordable housing," Ardern said this morning, speaking to reporters from Switzerland where she is attending the World Economic Forum.

"We set some goals around KiwiBuild and even if we're falling shy of those, we are still building affordable houses, just not as fast as we want and as many as what we want as quickly as we want," she said.

The Government set a target of 1000 KiwiBuild homes built by July this year but Housing Minister Phil Twyford admitted yesterday he now expected only 300 to be built by then.

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He told the Herald he was "pretty gutted" but was confident the Government would still achieve its 100,000 homes over 10 years promise.

The reason the KiwiBuild was so far behind schedule was because the buying off the plans scheme had hit a snag, he said.

"It's reliant on convincing developers to shift away from a business model which sees them building smaller numbers of medium and expensive priced houses, towards building greater numbers of affordable homes."

That had proved harder than expected, he said.

But the Government was looking at other ways to ramp up the KiwiBuild numbers, he said. He would not, however, be drawn on what this entailed.

"We will have more to say in the coming weeks about that."

As well as targeting 1000 KiwiBuild homes by July 2019, Twyford had previously committed to building 10,000 in 2020/21 and 12,000 every year after that until 2028.

Asked if those targets were still in place, he said he "hasn't looked at that" and would not be making statements about whether or not those targets would be met.

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Housing Minister Phil Twyford has admitted his flagship KiwiBuild policy will fall well short of its first-year target. Photo / Paul Taylor
Housing Minister Phil Twyford has admitted his flagship KiwiBuild policy will fall well short of its first-year target. Photo / Paul Taylor

"Targets are targets – they're something you set out to achieve but not things you can guarantee. We're not stepping away from those targets."

Ardern said today she still had confidence in Twyford.

"I do. This has always been a complex issue and I think this demonstrates just how hard it is, but we are not going to give up.

"We have already delivered KiwiBuild houses and those first home buyers who are already in those homes I know will appreciate what we've been able to achieve so far."

She also confirmed she was willing to keep Twyford in the portfolio for the duration of the programme.

"This is not about placing blame on individuals. This is about acknowledging that a housing crisis is a difficult thing to solve."

National's housing spokeswoman Judith Collins said yesterday that Twyford was letting down thousands of Kiwis.

KiwiBuild's website showed just 33 homes had been completed to date with 77 still being built. There had been just under 270 homes prequalified, with almost 47,000 registered expressions of interests.

"If he can't organise the delivery of 1000 houses a year, why on earth would we believe the minister when he says he's planning on building 10,000 houses a year," Collins said.

Taxpayers' Union executive director Jordan Williams called on Twyford to cancel the policy while it was still relatively cheap.

"By any measure, KiwiBuild is a terrible use of taxpayer funds," he said yesterday.

The Government has allocated $2 billion over 10 years to the scheme, with the intention that the money will be recycled back in as more houses were built.

Twyford's admission came after a report from the NZ Initiative which called KiwiBuild a "massive political and bureaucratic distraction".

It also followed the resignation of KiwiBuild head Stephen Barclay in the midst of an employment dispute.

Collins told Radio New Zealand today that the private sector had built 35,200 houses in the same period.

"I know who I would back on housing and it's not Phil Twyford," she said.

Collins said developers were telling her KiwiBuild was very difficult to deal with.

"They're dealing with a lot of people who clearly have no experience in construction, building or development."

Collins said a lack of numbers of buyers who had gone through pre-qualification was due to the type of homes that were being built and first home-buyers usually looked for "starter homes" that had been previously owned.

"You don't normally go in as a first home-buyer and buy a brand new house which is always more difficult, more expensive. It's always more expensive because of GST. Essentially it's 15 per cent on new houses."

Collins said National was willing to work with the Government on the Resource Management Act and planning rules.

"We're happy to help them because we think it's the right thing to do."