A KiwiBuild developer has defended the programme, saying the housing industry needs to embrace the plan.

Photo: RNZ/ Anneke Smith

The government has confirmed just 293 of a promised 1000 KiwiBuild homes will be built in the first year.

Housing Minister Phil Twyford pins the slow progress on lack of interest from developers - who say the programme doesn't offer much financial incentive.

But Shane Brealey, director of NZ Living - a developer responsible for 10 of the 47 KiwiBuild homes built so far, disagrees.

"Some of the technical aspects of the programme probably need a few adjustments, but I think typical, cagey old developers they like to sit back and watch to see how things are going to pan out.

"It's early days, I say to a lot of people and explain what we're doing and to me it's an absolute no brainer. It's low risk, but it is a very tough game and you've got to know how to deliver efficiently, good quality.

"All the fundamentals of property are unchanged with KiwiBuild - it still has to be good quality, it has to be in the right location, it has to be at a good price point."

Mr Brealey told Morning Report overseas construction companies would be all for KiwiBuild in their own backyard.

"If the Australian government were to put a policy like this out, it would have the Australian development community all over it.

"In Australia you've got the big Australian developers... with the big strong balance sheets and a lot of experience in doing big residential projects and rollouts, I'm sure they'd be all over it.

"It's probably a reflection of our boom and bust construction and development cycle. Our sector here just needs to adjust to this opportunity, understand the opportunity and get behind it because it's fundamentally sound and it works."

Mr Brealey said New Zealand's history with the housing market appeared to be repeating itself.

"The market is very, very quiet at the moment and if we don't do something different [we'll have] groundhog day.

"That looks like developers sitting on their land, the projects become fewer and smaller, the supply dries up, the demand catches up at some point and we'll be in for another price jump."