New Zealand First leader Winston Peters is being accused of "race-baiting" over an attack on Chinese airline crew moving into a former special housing area that was designed to help solve Auckland's housing crisis.

In a statement headed "Mt Albert state housing land now in Chinese hands", Peters said some of the former Housing NZ land at 98-130 Haverstock Rd in Sandringham "went to China Southern Airlines people from China and not to ease the housing shortage for Auckland residents".

He attached a photo showing a banner in front of a house saying in Chinese and English: "Warmly welcome the leadership from Aviation Services Department to China Southern Airlines Crew Apartment in Auckland, New Zealand."

 The property was given Special Housing Area status in May 2014, with a requirement 10 per cent of homes must be
The property was given Special Housing Area status in May 2014, with a requirement 10 per cent of homes must be "affordable. These areas were disestablished when the new Auckland Unitary Plan came into force last September. Photo / Supplied

National list MP Melissa Lee, who is based in Mt Albert, said the statement was "typical Winston Peters race-baiting".

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"He doesn't understand housing developments or special housing areas and is simply firing out ill-informed press releases when he sees the word 'Chinese'," she said.

Housing NZ confirmed that it sold the land in April 2013 to a private developer for a reported $8.76 million.

The property was given Special Housing Area status in May 2014, allowing fast-track consenting with a requirement that 10 per cent of the homes must be "affordable" - priced below 75 per cent of the median Auckland house price.

Auckland Council said at the time that 33 new homes would be built on the land, replacing 19 former state houses.

New houses on former Housing NZ land at 98-130 Haverstock Rd, Sandringham, one of which is now being used by China Southern Airlines. Photo / Supplied
New houses on former Housing NZ land at 98-130 Haverstock Rd, Sandringham, one of which is now being used by China Southern Airlines. Photo / Supplied

However the special housing areas were disestablished when the new Auckland Unitary Plan came into force last September.

Peters said he wanted to know why the special housing areas were abandoned "despite the National Party boasting for years how critical it was to meet the Auckland housing crisis".

"Meanwhile, at least 14 families were kicked out of the old Housing NZ houses for this development to take place," he said.

He said an apartment for a foreign air crew was not helping the housing crisis.

"It's a hotel-type arrangement," he said. "We are no longer talking about housing. We are talking about accommodation now, that's something different."

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A Housing NZ spokesman said all state tenants who were living in the 19 state houses on the site "were transferred to more suitable Housing New Zealand homes".

"We made the decision to sell the land as it is would not have been cost-effective to carry out a redevelopment within this high-value area of Auckland," he said.

"The sale of these properties provided Housing NZ with funds that have been reinvested in acquiring, building and improving social housing in other parts of Auckland."

At least some of the properties are now owned by TF Trustee Ltd, which is wholly owned by Tingting Feng of Royal Oak.

Lawyer Henry Feng, who submitted the company's documents to the Companies Office, said he would ask his client if he wished to comment.

Building and Construction Minister Nick Smith said only 3 per cent of property transfers currently involved overseas tax resident buyers and 3 per cent involved tax non-resident sellers.

"So claims that this relatively small part of the market is having a substantive effect on the marketplace are not supported," he said.

He said only 3 per cent of the 154 special housing areas still did not have resource consents for new homes, and they were still expected to yield 62,200 new homes.

"The special housing area is simply a mechanism for changing the zoning of the land to provide for more residential development," he said.

"It remained privately owned land. It was never suggested that we controlled who would subsequently buy and sell the land.

"It was nothing more than fast-tracking to get over the top of the problem of it taking an average of six or seven years to zone new land residential."