The Government has put the brakes on all plans to sell off state houses.
Housing Minister Phil Twyford today visited New Zealand's first ever state house, opened by Michael Joseph Savage in 1937, to make the announcement.
"Large-scale sales of state houses during a housing crisis do nothing to help house our most vulnerable people," he said.
It means the planned transfer of just under 2500 state houses in Christchurch, worth about $700 million in total, will be stopped.
"Tenants in the suburbs of Shirley, Bryndwr and Riccarton had been told they were likely to have a new landlord by mid next year," Twyford said.
"This week they will receive letters telling them their homes will not be sold. I'm pleased these families will be able to enjoy Christmas without the uncertainty this sale would create."
The sell-off programme introduced by the previous Government in 2015 resulted in 1124 state houses in Tauranga being purchased by Accessible Properties - a community housing provider owned by IHC, a service provider for people with intellectual disabilities.
Other attempts to transfer state houses hit a number of roadblocks, including the sole prospective purchaser of 348 houses in Invercargill, the PACT group, pulling out of the sale.
"Community housing providers have an important role to play in housing those in need, but the first and last provider of public housing must be the state," Twyford said.
While there was significant opposition to the selloff, the previous Government did have a condition in the transfer deal that the buyer of the Christchurch homes must also build 150 new social houses to add to the stock.
Minister Twyford says adding to the state housing stock is now the responsibility of Housing NZ.
"This Government is committed to not only keeping these houses within state ownership, but increasing the number of state houses. And a modernisation programme by Housing NZ will mean more dry, warm and healthy state houses.
However, the ruling won't stop Housing NZ from selling houses that are no longer fit for purpose to free up cash to rejuvenate its housing portfolio.
"Sales to renew and grow the stock are quite different from the systematic large-scale sales used by the previous Government to reduce the role of Housing NZ," Mr Twyford said.
A social housing stocktake released yesterday by the Auditor General showed a mismatch between what type of state houses were needed and what Housing NZ had available.
"Housing New Zealand has, relative to the family composition of those in need of housing, too many three-bedroom houses and too few one-bedroom houses. Housing New Zealand has been aware of this mismatch for some years," the report says.
It also recognised that the location of state houses did not match demand.
"Throughout the country, many of Housing New Zealand's houses are located in areas of lower demand, and there is a significant under-supply of houses in other areas," the report says.
"Auckland, in particular, has high demand for social housing because of the high cost of rent and a shortage of private rental accommodation."