"The problem is not with foreigners, the problem is with South Africans... foreigners find that they were sold houses by South Africans," said MEC Humphrey Mmemezi.
"We should rather spot these South Africans that are doing what they should not be doing, because RDP houses are for the poor."
He said people were only allowed to sell their RDP houses after eight years and when they have been given title deeds.
The MEC emphasised that rental stock was a "free for all" and that both South Africans and foreign nationals were allowed to rent RDP houses.
Six officials have been suspended on charges of corruption.
He said they were being investigated for allegedly having sold RDP houses and in some cases renting them.
The minister said after he met with the Alexandra stakeholders, it was agreed that people who applied for RDP houses in 1996, would be given first priority.
He said the elderly, disasbled and child headed homes would also get preference. The MEC said by the end of 2012, the department hope it would have housed all the 1996 applicants.
Mmemezi was briefing journalists on the outcome of his meeting with Alexandra stakeholders.