Construction giant Fletcher Building has confirmed it has met with Labour over a plan to build 100,000 new homes over the next ten years.
Labour believes it can cut down the price of housing by building large-scale housing projects under its Kiwibuild Housing Scheme.
Fletcher Building, one of a handful of building companies capable of constructing large scale building projects, agrees that large-scale builds would help bring down costs.
"It's very situational," said Investor Relations general manager Philip King.
"It depends on land cost and density but there is no doubt savings could be achieved with much greater scale of developments than what we see in New Zealand today."
The building company is responsible with the ever-expanding Stonefields development in Auckland's Mt Wellington.
It says it is currently only building around 300 houses a year.
"We could be build a lot more than that, our biggest constraint is land availability," said King.
However, the company will not be drawn on the on-going political debate around costing of Labour's Kiwibuild policy.
Labour is aiming to build homes at an average cost of $300,000.
"Some houses will be bigger and some will be smaller. We have averaged it across New Zealand," said King.
But National had dispute how Labour managed to calculate the average cost.
Prime Minister John Key is calling on Labour to apologise for "misleading the public".
Home affordability in New Zealand's cities deteriorated last year with the average metropolitan house costing 5.3 times the average income, up from 5.2 last year, sending them further up the "severely unaffordable" index.
However, building costs are not the only barrier to more affordable housing.
Finance Minister Bill English says the Government is focusing on four structural impediments in order to restore affordable housing in New Zealand: land supply, infrastructure, process and construction costs in a study into housing affordability.
He said the Government was "focused on working with councils" to make housing more affordable and would consider freeing up any state-owned land to be used for residential housing.
- with Fairfax