Bill English says he doesn't understand why people are unhappy the Government is spending $140,000 a day on emergency accommodation for the homeless.
The housing crisis is on track to cost the Government $50 million on motels and other "short-term measures" a year, but the Prime Minister says there's little else that can be done.
"If they're not in the motels, they haven't got anywhere warm and dry to live," he told The AM Show on Monday morning.
"I don't know why people are complaining about this. It's a short-term measure, it's necessary. We're not doing it to put them on holiday."
His comments come three days after Deputy Prime Minister Paula Bennett admitted the housing crisis had taken the Government by surprise.
"We had no idea how much it was going to cost," Ms Bennett told The AM Show on Friday morning.
"We had no idea it would ever be this big. No Government had ever picked up the bill for this. No Government has ever funded emergency housing."
Mr English says the Government has done a lot to prevent a repeat of last winter's crisis, which saw marae open their doors to house those in need.
"The housing market was rising quite sharply then and isn't now, rents were going up, we had a bit of a tough winter," he said.
"Measures have been taken since then, about $300 million has been spent. That's why we're able to place a lot of people at the moment. We've still got some of the winter to go - there will be more people out there with need, and we are geared up to do our best to meet that need."
Despite this, figures suggest there are homeless now than there were last winter. Auckland Council last week said there are now nearly 24,000 people without proper accommodation in the city, and Te Puea Marae chair Hurimoana Dennis told The Nation in May the problem was getting worse.
Last week, a Yale University report said New Zealand has the worst homelessness problem in the OECD, far ahead of Australia, Canada and the Czech Republic.
Mr English says the state housing stock is currently being updated to reflect the needs of modern New Zealand.
"We're finding for instance there's a lot more demand for one- and two-bedroom houses. As we've said for a while, the traditional state housing stock is mostly three-bedroom and not appropriate."
On Sunday, the Government announced a new $600 million effort to build infrastructure for new housing developments, avoiding the need for debt-laden councils to go further into the red.