Eight new state houses will be built in Rotorua by June and while that's been called a good starting point, there is still much more to be done, say locals.

The eight dwellings are some of the 155 new state houses to be built in 15 regional centres by the middle of this year, Housing and Urban Development Minister Phil Twyford announced in Rotorua yesterday.

The houses are in addition to the 117 state houses for Rotorua announced by the Government last April.

The new homes will mostly consist of one and two-bedroom properties and will cater to those most in need of state housing.

There will be two homes on Gem St, three between Kokako St and Old Quarry Rd and three on Gordon Rd.

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Housing New Zealand will construct the new houses on vacant land and larger properties to better utilise its landholdings.

Housing New Zealand deputy chief executive Greg Groufsky said the homes would help meet the increasing demand for state housing in Rotorua.

"More people and families are in need of a home, and we're responding to this need so that people have a warm and dry house before winter sets in.

"The eight new houses will add to the 647 properties we have in the region. We know more houses need to be built, so we're increasing the pace and supply of state housing across New Zealand.

"By adding extra homes to some of our existing properties we're being more efficient with our land. This also means that we're able to increase our housing stock more quickly and get people into new homes."

Twyford said this was the first step in building more new homes to help those most in need in the regions.

"In total, it will build more than 270 bedrooms for individuals or families in the areas where they are needed most."

Twyford said work would begin on the houses this month.

"These homes will be low-maintenance, fully insulated, and have carpets, curtains and double glazing.

"It's expected that people will start moving in from mid-2018."

Twyford said this was the largest building initiative Housing NZ had undertaken outside the main centres in decades.

"If we want to reduce homelessness, we must build more state houses.

"If more state houses had been built in the past decade, we would not have the levels of homelessness we do today."

The development was welcomed by Rotorua Mayor Steve Chadwick, who said housing was a priority for the district.

"Rotorua is now officially a medium growth area with a growing population and there's no doubt we need more housing."

She said some people in the community were desperate to find a property.

There are currently 141 households in Rotorua on the waiting list for a state home.

When the Ministry of Social Development took over the register in June 2014 there were 40.

"I receive regular pleas for help from people looking for homes and this is a good start in terms of catering to those in urgent need.

"I'm pleased our district has been included in this initial state housing work by the new Government."

Marjorie Wilbore has lived in state housing for the past 39 years. A new home will be built in her backyard.

"My opinion is that there's so many people on the streets, so many who are homeless and that need somewhere to live, it's sad to see.

"Where they are currently staying, whether that's under a bridge or in their car, that's an awful position to be in.

"If this is going to help people, then I am all for it."

Waiariki MP Tamati Coffey said housing was one of the issues that came up "time and time again" while he was on the campaign trail.

"Anything that helps to increase the housing stock here in Rotorua is a good thing.

"As a kid I was brought up in a state house, so I get a little kick from projects like this."

Rotorua MP Todd McClay said it was important for the Government to prioritise places like Rotorua which is a growing city.

"We recognised last year that housing was an issue, we announced funding for 117 new houses and signed the housing accord.

"This is only the tip of the iceberg. The two Rotorua-based MPs who are now in government, who were highly vocal about housing, now have to fight and prioritise Rotorua.

"The community will judge whether eight houses is our fair share."

Salvation Army Rotorua lieutenant Kylie Overbye said the eight houses were a great start.

"We are grateful to have additional housing coming to Rotorua as further investment into housing is required.

"We would like to see more social and affordable housing."

Tiny Deane, who works with local families in need, agreed with McClay the eight houses could only be seen as a starting point.

"I reckon it's great news, but we still need hundreds of houses."