More than 90 applications have been received from developers hoping to sell homes off the plan to the Government for its KiwiBuild programme.
Housing Minister Phil Twyford told a parliamentary select committee today the tender issued three weeks ago had had a "very encouraging" response from developers.
Not all the applications had been through due diligence but if they did, it would translate into several thousand affordable properties, Twyford said.
A total of 57 applications had come from Auckland and the remainder were from around the rest of the country including Queenstown, Wellington and Whangārei.
"I think what the response that we've had from the private sector shows that there is a lot of developments that are currently stalled due primarily to lack of liquidity in the residential market," he told the social services and community select committee.
In a statement, Twyford said it was a challenge for developers to sell enough properties off the plan to secure funding for construction.
"By underwriting or pre-purchasing homes in a proposed development, the Government can provide developers the certainty and backing they need to proceed. In return, we're accelerating the speed of these developments and ensuring they offer more affordable housing, so more first-home buyers can get on to the property ladder," he said.
In answer to questioning from National MPs at the committee, Twyford said good commercial judgment would be exercised to ensure the Government was not propping up failed developments.