The show challenges two young families to renovate, extend and transform two relocated houses.
At the end of the series, both houses are auctioned - but only one will be sold.
The winning family, chosen by public vote and judges Nat Davis (designer), Doug Thompson (builder/draughtsman) and Roger Walker (architect), wins the grand prize: their fully-renovated house and landscaped section, a package worth more than $500,000.
Host Jayne Kiely said she believed the show would return in 2011, but there would be no show next year.
Kiely blamed the economic climate for the show's cutting.
"It's just tight out there, everything is tight.
"A lot of people give a lot of stuff on Dream Home and it's just harder and harder to get those people on board."
Kiely was remaining positive that the axing was not permanent and the show would return.
"It's the kind of thing that you think is going to go on and on.
"I really don't think it's gone forever - a break is good."
The show screened its 10th season earlier this year and was produced by the now-closed Ninox Television.
TVNZ had earlier decided to commission the next season and had started scouting for locations and taking expressions of interest from couples wanting to be on the show.
TVNZ's Megan Richards said a business plan on the project revealed a financial shortfall.
"We did a business analysis which when it was completed [showed] the figures didn't stack up."
Richards said the decision was a reflection of the economic climate and a drop in advertising support.
"The revenue we might get from advertising is less than it would have been.
We have less money than we used to have."
Richards said the details of couples who had put their names forward would be kept for the future.
Ninox produced other shows, including Sensing Murder and Location, Location, Location.
A new season of Sensing Murder has been made and is set to screen at a later date.
Ninox was formed in 1988 by David Baldock, who also produced some of the last season of Mitre 10 Dream Home episodes.
He was convinced the show would return to TV screens. - Amanda Rushworth
Mitre 10 Dream Home was popular, with average ratings of 179,000 people.
Sensing Murder had an audience of 185,000.
