The High Court has dismissed a challenge by a lobby group against the government's plans to sell 1124 state houses in Tauranga to a private provider.

Lobby group State Housing Action argued in the High Court at Wellington that the proposed transfer of the Housing Corporation properties was illegal because the ministers hadn't considered a transfer contract as they were required to do.

Its other argument was that Finance Minister Bill English and Social Housing Minister Paula Bennett hadn't taken into account relevant matters and that the decision to sell was irrational.

But in a judgement published on Monday, Justice Simon France said there was no basis to say the minister's decision was an unreasonable exercise of statutory power.

"It is a decision with which the plaintiff disagrees because it reflects a policy choice the plaintiff rejects. However, as has often been said, policy is for the Minister, not the Courts," he said.

The legal challenge failed because it had "insufficient regard" to the statutory scheme which allows the ministers to make the decision they have, he said.

In February this year the Housing Corporation Act was amended to insert a new part allowing sale of Housing New Zealand properties to other social housing providers who then have to make them available to social housing tenants.

It wants to see about 2000 of 64,000 Housing NZ properties move to social housing providers but the Tauranga deal with IHC-owned Accessible Properties is the only one to proceed so far.

SHA told the court that the precedent-setting Tauranga deal represented the sale of $200 million worth of state assets.

Justice France said in his view, a considerable portion of the plaintiff's evidence was not properly admissible with much of it opinion evidence from "persons not qualified as experts to give such evidence".