Housing Minister Nick Smith is insisting that the accommodation shortage in Christchurch is a challenge, not a crisis.
A report on housing pressures in the earthquake-hit South Island city was released on Thursday by the Ministry of Business, Innovation and Employment which is responsible for housing.
The report says a loss of about 11,500 homes despite a population decline of 2% is driving up house prices and rents and increasing financial pressure on families in the region.
Some 250,000 homes need repairs.
Dr Smith said on Thursday there is no crisis.
"Is it challenging? Of course it is. We've got families facing rent increases - 15, 20 percent. We've got families that have had red zone properties and are trying to buy properties and house price inflation in Christchurch is strong.
"It's challenging - it's not a crisis and I've got a lot taking place. It gives me confidence we're going to get through."
However, the minister told Radio New Zealand's Checkpoint programme on Thursday it will take up to four years to address the shortage.
Dr Smith said the Government has helped 2100 households with accommodation assistance, established a service that has assisted over 2500 households and set up three temporary accommodation villages.
He announced a new development in the eastern suburb of Linwood with 40 houses, as well as 80 temporary homes for people to live while theirs get fixed and financial assistance.
Five thousand state houses would also be repaired, he said.