The director of a company that finds accommodation for earthquake rebuild workers in Christchurch says demand is not strong enough to build housing villages in the city.
The JGM Group has shelved plans to build several accommodation villages capable of housing up to 1000 workers.
A former JGM employee, who didn't want to be named, says the project was reviewed late last year and found to be unprofitable.
The project's architects , NOTT Architects, have confirmed that the plans have been scrapped.
The director of Magnitude Accommodation, Bruce Corfield, says it is too soon to build housing villages because there are not enough workers to fill them.
Mr Corfield says the rebuild has not properly started yet and workers would not be able to afford rents in the new villages.
Meanwhile, a University of Canterbury study has found that a lack of rental housing for construction workers is expected to cause delays in the rebuild.
The quakes damaged about three-quarters of the housing stock, or about 150,000 homes.
The Resilient Organisations Research Programme found a demand for affordable rental accommodation is likely to contribute to inflation, which could hinder the economic recovery.
The study's co-leader, Erica Seville, says there is a need for an increased supply of affordable rental housing to accommodate workers.
