Phil Twyford is backing down from his promise to deliver 1000 KiwiBuild homes by the middle of this year.
The Housing Minister said last year he aimed to have 1000 KiwiBuild homes completed by July 2019, with 5000 more ready by July 2020 and 10,000 more by July 2021.
But Mr Twyford now says he cannot guarantee that target will be met, telling RNZ's Morning Report he thinks it will be "tough to meet that target".
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"We're working flat out to meet that target. I'm not going to give you a prediction right now. We're not setting a new target," Mr Twyford told the radio station.
With only 33 KiwiBuild homes complete, it falls well short of the Government's target of having 1000 homes completed by July.
Mr Twyford said the market "hasn't been delivering to first-home buyers", but National's Housing Spokesperson Judith Collins said "neither is he".
She said Mr Twyford should be "looking at reforming the Resource Management Act (RMA)," adding that "planning and consenting for land use is key to delivering affordable housing".
Her comments echoed National leader Simon Bridges who told The AM Show on Monday that development of the country's housing market has been restrained by the RMA.
National MP Stuart Smith said this month the National Party will release its draft legislation this year to replace the RMA.
"We want to simplify this complex but vital Act to give people more certainty on issues that come under the RMA," he wrote in an opinion piece.
Ms Collins criticised Mr Twyford for changing "almost every aspect of KiwiBuild since his election promise".
The scheme has been subject to scrutiny, over changes made to price caps, the eligibility criteria, and allowing buyers to sell their KiwiBuild property within three years with Government permission - going against its original goal of stopping buyers reaping windfall gains.
Mr Twyford said it hasn't helped having the head of the KiwiBuild programme, Stephen Barclay, resign last week over an "employment dispute".
The 2016 KiwiBuild policy has been a big part of the Government's solution to New Zealand's housing crisis, but recent data shows New Zealand cities rank among the world's most unaffordable housing markets.
The 15th annual Demographia International Housing Affordability Study found that Tauranga was the eighth most unaffordable market in the world, followed by Auckland, and among the likes of Sydney, Los Angeles and Hong Kong.
There are currently 25 KiwiBuild homes under construction in Auckland's Onehunga, seven in Papakura and nine in Otahuhu.
Fifteen are under construction in Wanaka, while 21 are still yet to be announced.