Housing Minister Phil Twyford won't guarantee that the Government will meet its target of having 1000 KiwiBuild homes ready by July and admits it will be tough to hit it from here.

Less than 50 homes have been built under Twyford's flagship housing scheme, which aimed to have 1000 places finished by the middle of this year.

The comments come after a damning report, from the New Zealand Initiative, slammed the Government programme as a "bewildered beast".

The report claims KiwiBuild has little hope of delivering on its goals and is just a distraction from the real housing solutions.

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Phil Twyford told NewstalkZB's Mike Hosking this morning that while the first few months have been tougher than expected, overall it's been a success.

"We are six months in, we have got 47 homes completed, several hundred under construction, 4000 under contract and another 10,000 on top of that planned for the large scale urban development projects that we are in the process of setting up."

However, Hosking wasn't convinced, listing multiple issues he saw with the programme.

"You promised houses for people who were 'locked out of the market' but that's not the case," Hosking said.

"These are not people locked out of the market, these are people with $650,000 to spend.

"You've got ballots with no demand. You've got prices in places like New Plymouth which are actually higher than the average price. Houses off the plan don't sell."

Hosking also raised the issue of Kiwibuild boss Stephen Barclay departing Kiwibuild.

Twyford hit back at the claims, addressing the KiwiBuild prices first.

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He started with the issue of the house prices in New Plymouth.

"[The prices] are only higher than the average price in the suburb where they are being built, which has basically been a bombed out, derelict neighbourhood that used to be a state housing area which was mostly demolished."

"The New Plymouth KiwiBuild houses are significantly lower than the average price in New Plymouth as a whole."

However, Hosking wasn't convinced, saying that's "simply not true".

"I looked at the houses for sale, there were 26 for sale, they all looked perfectly respectable and they were cheaper than yours," Hosking said.

The Housing Minister disagreed, saying the suburb is in "dire straights".

"We are putting in modest affordable houses that are below the New Plymouth average," Twyford said.

"You say the houses aren't affordable for people, in fact, more than half the KiwiBuild houses that have been built and sold have gone to people who were on household incomes of less than $100,000.

"In our most expensive housing markets, there are young couples who might have a household income pre-tax of let's say $150,000, they cannot find anything affordable in places like Auckland and Queenstown."

Twyford, in a separate interview, said New Zealand had an issue with housing and that Auckland and Queenstown it was "severely unaffordable".

"This country is a housing basket case. That's why we're doing Kiwibuild, that's why we're doing more state housing," Twyford told RNZ.

Responding to questions in ZB over whether a $650,000 homes in Auckland were affordable, Twyford said in the city people were finding it very hard to find anything of "decent quality" that is under $600,000.

Many have questioned whether $650,000 is really affordable for a first home. Photo/File.
Many have questioned whether $650,000 is really affordable for a first home. Photo/File.

In terms of houses that have been balloted but not sold, he said a lot of them hadn't been built at the time.

"What we've found is most first home buyers, they want to look and see and feel the house before they buy it."

However, Twyford said they working directly with the private market to incentivise them to build affordable homes.

"We've started from a standing start, and no one said it would be easy, but we are determined to turn around the market failure that has seen less than 5 per cent of new builds in this country in the bottom 25 per cent of the price bracket."

He reiterated the Government's commitment to building "affordable homes for first home buyers".

"We are building affordable houses and I expect that almost all of them will sell and if they don't sell, we will sell them on the open market and that's still putting affordable houses into the supply.

"We are also doing a lot of other things other than KiwiBuild that are about addressing the housing crisis...KiwiBuild is part of a big comprehensive programme to fix the housing crisis."

When asked about the head of KiwiBuild Stephen Barclay's resignation, Twyford said it is an employment dispute that he won't wade into publically.

"I'm going to allow that dispute to be resolved in a proper way. I'm not going to comment on the detail, it would be inappropriate and unhelpful for me to do that."

However, he said he stands by KiwiBuild and its commitment to build affordable houses for New Zealanders.

"We are going to build affordable houses for first home buyers. We will refine and improve this programme as we go until we get it right but this is a 10-year programme."