In Auckland the average house price is tipped to pass $1 million when QV releases it next house price index figures next month. Spiralling housing costs are forcing people into substandard and overcrowded housing, with many others forced to live rough or in cars.
Twyford said it was time the Government stopped acting like a possum in the headlights and demonstrated the urgency the problem demanded.
National was in denial about the housing crisis and even trying to challenge its own official figures on the matter, he said.
"The National Government seems to think that if you're a pensioner living in a campground because you can't find any affordable rental housing that you've got a home. This just beggars belief.
"Put a roof over the heads of these people."
Twyford said it was embarrassing that international media were picking up the issue and it was not fair that everyday Kiwis had to pick up the slack.
His comments follow a report this morning on TVNZ's Q+A investigating the growing homelessness problem in the tourism hotspot of Taupo, as well as international news reports about New Zealand homelessness in the likes of The Guardian and Al Jazeera.
Building and Housing Minister Nick Smith referred questions this morning to Social Housing Minister Paula Bennett.
She said declaring a state of emergency was not a real solution.
Twyford's comments were negligent and the Government was rolling out emergency housing as fast as it could, Bennett said.
"Well I don't think that Phil Twyford's engaging his brain and he's just come out with state of emergency without actually thinking about what that would mean. I don't want to see tent cities in our beautiful country and those are not the solutions for those that have fallen on hard times."
She said the Government had more than $50 million going towards community housing providers this year.