UPDATED 3.31PM The Government is redeveloping 300 state homes on Auckland's North Shore, and turning them into 1200 new homes.

It's a $750 million project in the suburb of Northcote.

There will be up to 400 new Housing New Zealand homes, and up to 800 homes put on the market.

While the Government has never acknowledged there's a housing crisis, it's moving into top gear to make more houses available.

Finance Minister Bill English told reporters at Northcote that the Government owns one in every 16 houses in New Zealand.

“You can tell which are ours, it’s been an issue since the 70s. We want to do a better job for people at times of their life who need help with housing, but that’s only at times of their life,” Mr English said.

“Because Housing New Zealand is a Government entity it’s easy to criticise, we criticise them ourselves,” Mr English said. 

Mr English said things learned from housing rebuilds in Christchurch would be put to use in the Auckland development “to change the face of suburbs like this”.

Housing Minister Nick Smith said the development will bring the aging housing stock up to date.

""They'll be warmer and drier and that is a good thing for the community's health," he said.

He said there will be a wider mix in size of state house to fit today's families, and they will be more dispersed throughout communities.

"And that is because we feel communities function better if there is that mix of social housing, of affordable housing, and general market housing. And the Government's objective would be that if you drove down the street, you wouldn't be able to pick one from another one."

Mr Smith said new rules increase the number of state houses that are able to be built across Auckland from 3000 - to 30,000.

"In other words it's freeing up the rules to allow a greater degree of density, and this is one of the first projects under the new Unitary Plan."

The development will take five years to complete, with the first stage - replacing around 20 state houses with 59 social housing homes - already underway.