Asked for an update, Finance Minister Bill English said the Government would not be going head with the sale of the 348 houses "at this time''.
When the sole bidder, Dunedin-based Pact, pulled out, the Government said it was putting the process on hold to assess its options.
"Nothing has changed since then but, as the minister said in his response to you, that doesn't mean something could not happen in Invercargill in the future,'' a spokesman said when asked for clarification.
There had been no talks with the Invercargill City Council over the houses, Mr English confirmed.
Invercargill opponents of the sell-off plan to hold a forum next Thursday to gauge local need for housing. Dr Liz Craig, Labour's candidate for the Invercargill electorate, is helping to co-ordinate the forum.
"It's very hard to get a sense of Invercargill's social housing needs from official statistics.
"Invercargill's reportedly stable demand for social housing and the fact there are only 15 people on Housing NZ's official waiting list is in sharp contrast to reports that the council's social housing is at 98% occupancy, with 40 on their waiting list at any given time,'' Dr Craig said.
Labour Party housing spokesman Phil Twyford said the homeless crisis had grown much more visible, and the Government's state house sell-off was "in tatters''.
"It's becoming politically untenable given the housing crisis.
Invercargill and Tauranga were the flagship cities for the mass state sell-off, and in Tauranga the process was continuing.
The Government was selling state houses in many centres in piecemeal fashion, and since 2011 numbers had fallen by 2600, Mr Twyford said.
"They're trying to shift the capital asset to Auckland, where the population growth is, and as a result they are asset-stripping towns like Invercargill.''
