"We are disappointed by this, which involved removing chattels and causing real damage to the new home.
"Incidents like this have implications on our ability to house families that are in real need of warm and dry housing in Napier."
He said they are looking to tenant the property in the coming weeks.
Master Builders Hawke's Bay president Scott Taylor said it was certainly very unusual in a residential building contract to have a security guard watching the property.
He said, although from a builders' perspective they have a health and safety responsibility to keep people out of the building site by fencing off the property, 24/7 watch was not typical.
"It is more than likely a short-term measure until the house can be fixed back to its original state, ready for some deserving family.
"We have had our own experiences of burglaries to new builds and it can be heartbreaking to see all our hard work ruined. It is up to the individual if they want to go to that extent, but it's not a requirement or law to have security watching it.
"I'm sure the [builders] will be disappointed, as will Housing New Zealand, that this has happened, and will be taking all steps to avoid it happening again."
He said given the rise in the region's burglaries, security guards could well become a "more familiar sight".
However HSM group director Matt Stevenson said several building firms in the region used their services.
"When the building is not fully secure, there can be incidents of people breaking in and stealing bits and pieces that are in the house, or damaging the house."
He said it was "not necessarily" a costly experience, but depended on the type of security needed and was not a permanent fixture.
Stevenson has seen incidents of houses under construction being stripped of their contents, and others where squatters had taken over.
"The advantage of having a guard on site is deterring them before they break in."