A community housing group says they are "confused" as to why Housing New Zealand is struggling to build homes and has resorted to buying them to meet urgent housing demands.
Official documents given to ONE News yesterday shows that Housing NZ needs 3000 more homes in Auckland to meet requirements.
To do this Housing NZ has resorted to buying homes on the open market in an effort to try and meet urgent demand for state housing.
A move that Peter Jeffries from the Auckland Community Housing Network told TVNZ's Breakfast programme was "fundamentally wrong".
"They are going out there and buying when they should be building more homes. We think that's fundamentally wrong."
Mr Jeffries says the current housing market needs more housing and that Housing NZ should be focusing on building not competing in the market by buying.
"By going out and buying they're going out and directly competing on the market with first time home buyers. They really shouldn't be competing at this time."
As part of Housing NZ's plan 2000 new homes were to be built in Auckland by late next year, but come February only 81 had been finished. That equates to fewer than half the number expected.
Mr Jeffries says he's surprised at the lack of houses Housing NZ has built when the Auckland Community Housing Network has so far built 300 homes.
"We're confused at why they are struggling to build homes.
"We will build 500 homes in the next 12 to 18 months."
However, despite the poor numbers displayed by Housing NZ Finance Minister Bill English says he still has confidence the target of 2000 will be met, and if buying on-the-market homes is necessary then it should happen.
"We have to be able to house the most serious, and if that means buying some on the market then that's gotta be done," he said.