The official waiting list for social housing continues to rise and is nearing 5000 households.
The Social Housing Quarterly Report released today showed that the number of people waiting for a house rose from 4771 to 4865 in the past three months, an increase of 2 per cent.
That is the highest level since the Ministry of Social Development took over the social housing register in mid-2014.
However, the report also showed the waiting list had decreased slightly in Auckland, where demand for housing was greatest and where the Government has been concentrating its supply efforts.
The increase is instead being driven by growing lists in Hamilton, Wellington and Lower Hutt.
Social Housing Minister Amy Adams noted that the increases in the waiting list were slowing. In the previous quarter, it had grown by 3.7 per cent.
She pointed to some of the positives in the latest report. The average waiting time for a house had fallen from 115 days to 107 days, and 1800 housing applications had been approved compared to 1780 the previous quarter.
The latest report also showed that Government spent $8.8m on housing homeless people in motels in the past three months, up from $7.7m in the previous quarter.
That was well beyond the initial annual budget of $2m.
Asked today whether the Government had underestimated the problem, Prime Minister Bill English said there was always going to be high demand for Government schemes in a tight housing market.
He pointed to the Government's $300m investment in emergency housing, announced last year, and said it was "unfolding rapidly".
English reiterated that finding space for new housing, not funding was the main problem to increasing the social housing stock.
Labour's housing spokesman Phil Twyford said if the grants continued at the same rate, the Government would be spending $33m a year on housing the homeless in motels.
"Of course everyone wants to see homeless families get a roof over their heads, but it is a scandal that National has allowed the housing crisis to get so out of control that people need to be put up in motels in these numbers."
Adams said she expected the demand for special needs grants to fall as more transitional and social housing was put in place.
"These numbers underscore the importance of our plan to grow the number of social houses available, from 66,000 today to 72,000 over the next three years."
In all, the Government spent $550m on housing support in the past three months, through accommodation supplements, special grants and income-related rent subsidies.