Opposition parties are fighting a Bill that would allow the Government to sell state houses to private providers.
The policy was announced earlier this year, when plans were unveiled to sell between 1000 and 2000 state houses to community housing providers.
Since then, it has been confirmed 1140 properties in Tauranga and 370 in Invercargill will be put on the block.
Several social housing providers, including two from Australia, have expressed an interest.
Finance Minister Bill English says it will be a few months before he knows who is serious.
Labour, the Greens and NZ First say it is another asset sale.
"This is sickening," Labour's Phil Twyford said during the Bill's first reading debate on Tuesday night.
"The Government is having secret meetings with merchant bankers and developers who want to get their hands on these assets."
Green Party co-leader Metiria Turei said the Bill made cabinet ministers the sole owners of an $18 billion asset built up over generations.
"They can sell anything they want to anyone they like, from anywhere, for any price," she said.
NZ First's Denis O'Rourke said the policy is intended to get the state out of social housing.
"The vast majority of New Zealanders say this isn't OK - and the Government simply doesn't care," he said.
Government MPs defended the policy and said opposition MPs are out of date and out of touch.
"They go to bed every night holding their communist manifesto under their pillows, with great dreams of state intervention," said Matt Doocey.
The Bill passed its first reading by 63 votes to 58.
It has been sent to a select committee for public submissions.