The Government is preparing to build tens of thousands of houses for private sale in Auckland as it tries to tackle the city's housing crisis, Finance Minister Bill English says.

The Government has been pushed to become more hands-on in the Auckland housing market, with average house prices in the city recently passing the $1 million mark.

Finance Minister Bill English says the number of affordable houses will be decided "development by development".

English said the Government was set to become a significant supplier of medium-density housing in Auckland in coming years, working on large-scale redevelopments of Housing New Zealand land.

The projects would be similar to the Northcote development announced last month, where 300 existing Housing NZ properties will be turned into 1200 new homes, with as many as two-thirds being sold to the private sector.

English said the Auckland Council's new Unitary Plan would allow the Government to build 30,000 or more houses in the city, more than 10 times the previous figure, and it would be "silly not to do that when there's strong demand".

The number of affordable houses would be decided "development by development", but the Government was committed to building more social and affordable housing to meet demand.