Nearly all the rental houses assessed for a warrant of fitness trial have failed on at least one criteria.
The trial is aimed at creating a national standard for housing, similar to a vehicle warrant of fitness.
Of the 144 council and privately-owned properties in five cities inspected, 94 percent failed at least one of the 31 criteria on the checklist.
A spokesperson for the trial, Dr Julie Bennett from the University of Otago, said more than one third lacked proper heating and about 20 percent had inadequate insulation.
Dr Bennett said the results were encouraging despite the failings, given half all New Zealand's 1.7 million homes are poorly insulated.
The group working on the trial will fine-tune the inspection system, and councils and landlords will investigate a voluntary warrant of fitness scheme.
Dr Bennett said she supported a compulsory warrant for rentals, but that would need legislative changes.
A landlord involved in the trial, Anil Anna, said a compulsory system would lead to higher rents.
Listen to more