UPDATED 5.42PM: Housing Minister Nick Smith has unveiled four sites in Auckland where up to 600 new homes could be built on vacant Crown land.

LISTEN: Nick Smith - Building more houses

The housing ministry will buy 10 parcels of land in Massey East, totalling nine and a half hectares.

Three other sites are in the pipeline, at Manukau, Avondale and Hobsonville.

Dr Smith showed reporters around the earmarked areas today. He said by partnering with private housing companies the Government could increase housing supply, but also "drive pace" to prevent land banking and demand a proportion of "affordable" homes priced under $550,000 to meet the Kiwisaver home start grant scheme threshold.

Dr Smith unveiled the plan to 250 developers at a meeting in Auckland and said there's a huge level of interest.

"There are at least six companies in the room from Australia, that is deliberate. One of the difficulties in the New Zealand housing market is too much of our homes are built by bespoke small companies."

"If we're going to get more affordable housing we need scale."

The Government will not have to pay for the land until the houses have been built and sold, Smith said.

"The other reason the government is not simply selling these blocks off is there's always a risk that you'll simply have a developer landbank them and key parts of the agreement will be them delivering those houses [quickly]."

However, Labour's housing spokesperson Phil Twyford claims Dr Smith still has work to do if he wants to live up to his promised 500 hectares.

Twyford suggested with the dearth of land available that'd mean getting rid of cemeteries, power substations and the like.

Meanwhile, a rugby ground and a military camp are being subdivided as part of a major sell-off by the Auckland Council.

It's selling off $350 million of surplus properties for the building of nearly3000 homes.

They include the former Avondale ground of Suburbs Rugby Club, where 25 terraced homes will be built.

Auckland Council Properties chief David Rankin says the unused land is being put to good use and many of the homes will be affordable.

“We hope the development will help give other land owners in and around the town centre the confidence to develop their own land and continue the regeneration process for the benefit of the local community”, Mr Rankin says.

“There is a requirement that a portion of the homes to be built within the Racecourse Parade subdivision will be ‘affordable’ – that is costing within 75 percent of median property values for the surrounding area.”