Halfway houses for paroled prisoners would cut reoffending rates and it makes no sense to have a gap in this area, the head of the Parole Board says.

Sir David Carruthers told the Prison Fellowship conference the greatest challenge the board faced was finding stable accommodation. Of 269 prisoners on preventive detention, only 16 were out on parole.

"It is almost impossible to find stable accommodation for them in the communities of this country. Frankly, they are not wanted. When we have released people, they have been outed, the released undermined and [the parolees] returned to prison."

But 216 prisoners sentenced to life were on parole. About 400 murderers were in prison. "You can see there are a significant proportion safely released, making contributions to the communities."

Canada, which has nearly 400 halfway houses, was six times as successful at reducing reoffending than the standard model of a prisoner serving their sentence in full.

"The halfway house is designed to avoid gate-fever and to be a bridge back into the community, back to church, back to groups, back to budgeting, in a changed world."

Gate-fever is the fear that drives a prisoner, about to be released, to commit an offence to keep them in prison.

"Australia, Singapore, US, Ireland, Scotland, India, England, Canada, China ... and so on. How is that other intelligent and sensible people are finding value in this elsewhere in the world, but we are not?"

Prison Fellowship national director Robin Gunston said halfway houses would fill a "massive gap" in the system that had long been neglected by the Government. Some halfway houses had lowered recidivism rates to as low as 3 per cent. "The cost would be a third of the cost of keeping them in prison."

Latest figures from the Department of Corrections show 37 per cent of prisoners are re-imprisoned and 59 per cent are re-convicted within two years.

Associate Corrections Minister Pita Sharples said he expected the new Whare Oranga Ake units to reduce reoffending to "almost nil". The two units, each housing 16 beds, are expected to be up and running in Auckland and Hawkes Bay next year.