The Green Party is calling on the Government to release details over how many new state houses will be created by selling state housing stock to overseas buyers.
The Government plans to sell thousands of state houses to social housing providers by 2017, and Horizon Housing, a not-for-profit charity based on Australia's Gold Coast, has expressed interest in buying more than 400 of them.
Prime Minister John Key told Morning Report today he was open to the possibility of selling state houses to an overseas-based company or organisation.
He said there were potential benefits in the sale, but it was unclear exactly what Horizon was proposing.
"There may well be advantages of social housing providers with links or different services they can provide," Mr Key said. "Can't rule that out ... just don't know what other things they particularly do."
He said the Crown would go through a final tendering process. "Ultimately someone will be selected, hopefully on what they bring to the table."
But Greens' co-leader Metiria Turei said selling state housing to Australian interests was not the answer.
"The New Zealand state housing stock was built, and is being built, for the most vulnerable New Zealand families," she said.
"There is no evidence that an Australian agency - with no history in New Zealand - is committed to providing state housing, social housing."
Ms Turei said the most efficient way to provide more homes for vulnerable New Zealanders was for the Government to build them.
Labour Party leader Andrew Little also said he did not think many taxpayers would be happy to pay an Australian organisation to run New Zealand's social housing programme.
Mr Little said the Government must be desperate if it was considering selling state housing stock to overseas buyers.
"I'm surprised now that things have got so desperate for the Government that they are now looking for an Australian buyer," Mr Little said.
It was the Government's job to provide state housing, he said.
"They can't find any other New Zealand buyer to do it so now they've gone offshore and you kind of have to wonder, will it stop at Australia? Will there be other potential overseas buyers from other countries who they will look to?
"And this for providing housing and housing support to our most vulnerable? No, that doesn't stack up for me."
He said community housing provider Horizon Housing might be a not-for-profit, but it was essentially just a property manager from Australia.
"I'm not quite sure what it is about our current set-up, and Housing New Zealand in the 80 years that it has been doing the job, that has changed that means we have to hand it over to Australians."
Mr Little said the real value was in the land.
"Once we sell that land to overseas buyers we will never get it back, and this at a time when we have the lowest level of home ownership since 1951."
Mangere Budgeting Services Trust's chief executive Darryl Evans said the Government should commit to working with local housing groups.
He said the state houses should be retained in New Zealand ownership, so families had security of tenure.
Housing New Zealand Minister Bill English has said the Government would sell to anyone who could improve the lives of tenants.