News a Chinese billionaire is lining up to buy Tauranga's state houses off the government is being opposed by the State Housing Action Group.

'New Zealand needs more state housing, not less,” says SHAN spokesman John Minto.

The government is planning on selling 1140 state houses in Tauranga. File photo.

'We are in the middle of a housing crisis for low and middle income New Zealanders and only the government has the resources and the capacity to provide the large number of quality, affordable housing so desperately needed.

Chinese property billionaire Dr Henry Cheng Kar-Shun has joined Australian-based Horizon Housing as the second foreign investor wanting to buy state houses from the government.

Treasury confirmed last August that the proposed sale of around 1140 Housing NZ properties in Tauranga and 370 in Invercargill will proceed to the next phase of the commercial transaction process - market sounding. Read more here.

John believes the Group sees rich pickings to be made from vulnerable state house tenants through 'very exciting market opportunities” provided by the government.

'Our current focus is on New Zealand where we have been shortlisted for Auckland City Council's ‘Housing for Older Persons' Project. Additionally, we are actively engaging in market soundings on Tamaki Regeneration and Tauranga Stock Transfer projects,” says Dr Cheng's Pinnacle Group website.

'New Zealand is providing very exciting market opportunities as the Government seeks innovative and transformative reform of the way social housing is managed and tenants supported,” the website states.

'As we have done with Horizon Housing, SHAN has written to Dr Cheng expressing our strong opposition to any purchaser, domestic or overseas, buying state houses,” says John.