Other Homeswest staff "coached" non-indigenous tenants in the best way to complain against their Aboriginal neighbours and used coded language to discriminate against Aborigines.

Releasing the report, Finding a Place, yesterday the state's Equal Opportunity Commission revealed Aborigines were consistently allocated poorer houses than non-indigenous people.

Department of Housing and Works executive director Greg Joyce called the findings an insult and a racial slur on the 400 people who worked on Homeswest's "front line".

"In practice, positive discrimination has led to a situation where Aboriginal tenancies accumulate up to seven times the (rent) arrears, six times more tenant-caused damage and twice the amount of maintenance expenditure as non-Aboriginal tenancies," Mr Joyce said.

Housing Minister Nick Griffiths yesterday backed Homeswest, saying 40 per cent of the report's 165 recommendations were already implemented. He conceded others were constructive.

The report recommends anti-racism training for some staff, improved house maintenance, the construction of more houses and the demolition of substandard properties.

More than 500 submissions were made to the inquiry.

A Homeswest officer said managers pressured staff to give "good properties" to non-indigenous tenants.

"They think the properties do belong to them," the officer said. "They say, 'I want a nice person for this property', (which means) that kind of rules out the next Aboriginal person on the list."

Associate professor Ted Wilkes, an indigenous health advocate who helped run the inquiry's reference committee, said aspects of the report were devastating.

He said the poor standard of housing for many rural Aborigines did not appear to have improved since he conducted a sample study 10 years ago.

"I've actually lived in a Homeswest house . . . and there is racism in the way services are delivered to our people – we live it."

The inquiry – the nation's first comprehensive investigation into alleged racism in housing – began in 2002 when allegations against Homeswest of discrimination reached 37 per cent of the commission's workload.

The inquiry was told indigenous families were placed in houses listed for demolition. A woman with two children was moved into a house infested with cockroaches, with no gas, no secure doors or windows and water leaking through electrical fittings.

She was told no repairs could be done because the house was to be demolished.