The Government is putting the brakes on a major housing development in Auckland because it is worried the houses will not sell.
Housing Minister Phil Heatley says the project at the former Hobsonville Air Base is still going ahead, but at a slower place than originally planned.
A subsidiary of Housing New Zealand is planning to build 1100 homes covering 60 hectares.
But Housing Minister Phil Heatley has raised concerns and changes will be made to the project, including taking a more conservative approach so fewer houses are built in the immediate future.
Papers obtained by Radio New Zealand under the Official Information Act reveal the Treasury has real concerns about Housing New Zealand's management of the project.
Mr Heatley says he requested a paper from the corporation on the development in light of the economic recession and the National-led Government's policy that the development not include any state houses.
He says the report recognised there have been changes to the building environment.
Housing New Zealand has to be more realistic about the demand for new houses given the property market is depressed, Mr Heatley says.
Labour's housing spokesperson George Hawkins criticised the slowdown, as the project would provide jobs during a depressed housing market.
He says now is the time to build new houses to provide work for contractors and to ensure there is a supply of affordable housing.
Green Party housing spokesperson Sue Bradford says the Government should use the opportunity to build state houses at Hobsonville and scrap plans for the commercial development.
Waitakere City deputy mayor Penny Hulse says the development should go forward as quickly as possible, as it will provide not only homes, but a boost to the construction industry and the community.