Dr Smith said it may have been possible that the balcony did meet standards but that the loading from the large number of students on it was in excess of what the Building Code required.
"I am open to all possibilities but want to ensure we do everything possible to avoid these sorts of building accidents."
Dunedin mayor Dave Cull welcomed the Government investigation.
"It should look at not only whether this balcony was built to standard, but whether the standards are robust enough."
A WorkSafe New Zealand spokeswoman said the department would decide whether to launch an investigation and were working with police.
A preliminary report on the balcony collapse is expected to be complete by the end of March.
Additional reporting: Otago Daily Times