However, it was not the increased levels of dust mites that was associated with wheezing - it was the dampness itself.
The study also found if a child already had asthma, it was made worse by dampness and mould in the home.
Professor Crane, who is the director of Otago University's Wellington Asthma Research Group, said the findings had significant implications for New Zealand and the current emphasis on children's health and welfare.
"It is perhaps not surprising given this data that we have so much serious respiratory illness in children in New Zealand - we have such poor quality housing and so many children living in damp, cold, mouldy poorly heated often rented accommodation."
He said government and health professionals had largely ignored these problems until recently, and he hoped the study would prompt further action.
The Every Child Counts healthy homes campaign, which will run until next year's election, was launched this morning.
The campaign urges all political parties to ensure every child lives in a home that is warm, dry, ventilated, safe and not overcrowded.
Every Child Counts manager Deborah Morris-Travers said housing had lacked political commitment and focus.
"We've left housing up to the market, and when it comes to the quality and quantity of housing in New Zealand, it's quite clear that the market has failed."
She said measures like insulation subsidies were a good start, but the Government needed to do more - which included expanding housing health checks from state houses to include private rentals.
"Frankly, given the health costs associated with poor housing, there's every reason for them to get on and do it, and there's no excuse really to sit on their hands and not do more."
Housing Minister Nick Smith agreed there was a link between cold, damp and poorly insulated homes and chronic respiratory diseases like asthma.
"This report further points to the importance of the Government's work on a housing warrant of fitness, which was announced as part of this year's Budget, and I am progressing work with officials on its development."
Dr Smith said the warrant of fitness would apply to Housing New Zealand houses and would later be extended to the community housing sector.
He said the Government had invested $420 million in a "massive programme" of private home insulation which had insulted 215,000 homes so far, with a further 46,000 homes to benefit.
Housing New Zealand had also committed to properly insulating all 69,000 state houses by the end of the year.
Dr Smith acknowledged overcrowding contributed to disease.
He said the Government would increase the number of four- and five-bedroom state homes by spending $320m on adding one extra bedroom to 1000 three-bedroom homes, and two extra bedrooms to another 1000 three-bedroom homes.
The findings of the second phase of the study have been published in the latest issue of the journal Clinical and Experimental Allergy.
