A ministry dedicated to housing issues will be set up this year to advise the Government on its plans to make homes more affordable and reduce homelessness.

Housing and Urban Development Minister Phil Twyford has announced the Ministry of Housing and Urban Development, and said it would advise KiwiBuild.

It would act as the Government's lead advisory group, providing advice on issues such as house prices, financing for first-home buyers and the quality of rental properties, he said.

The ministry would end the "fragmented current approach" by numerous government ministries working to tackle housing issues, he said.

From August 1, units from within three other Government ministries would merge to become the housing ministry, using existing funding from their respective agencies.

It would take the Ministry of Business, Innovation and Employment's housing and urban policy functions, its KiwiBuild unit and the Community Housing Regulatory Authority.

Treasury's monitoring of Housing New Zealand and the Tāmaki Redevelopment Company would be wound into the housing ministry.

The Ministry of Social Development would keep its function assessing and managing people's need for public housing; however, its policy for emergency, transitional and public housing would become part of the new ministry.

The official housing ministry would begin operating from October 1.

Act Party leader David Seymour said in a statement that a new ministry would make the housing crisis worse.

Reforming the Resource Management Act to make it easier for the private sector to build homes was a better idea, he said.

"Bureaucracy – in the form of the 900-page Resource Management Act – should be public enemy number one when it comes to the housing crisis."

- Stuff