Floating houses will be built and docked in Gulf Harbour development as a novel way of beating rising land prices.

Floating houses are planned for Gulf Harbour, north of Auckland.

In what appears to be a novel solution to the city's tightly constrained land supply and sky-rocketing prices, construction of The Boat Sheds project will begin in the New Year, answering the desire for waterfront location living.

Michael Webb-Speight, a development consultant to the Fairway Bay project, said Auckland's population was increasing fast and houses on the water were an obvious solution.

"With land and property becoming scarcer, we need to find ways to better use the water that surrounds the city and we believe this is part of the solution. Many Kiwis dream of living near the water but this takes that to the extreme - living on top of the water in a floating home," he said, citing a BBC report quoting development experts saying on-the-water communities could be a more sustainable, affordable and safer option than building on land.

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But deputy mayor Penny Hulse expressed reservations.

"The idea of floating houses could have a negative impact on our coastal areas and will have to be carefully considered," she said.

Twenty houses will be docked at the Fairway Bay marina but buyers will not get titles registered in the usual way with Land Information New Zealand. Instead, they will have a long-term licence agreement for use of the berth where their house is moored.

Mr Webb-Speight thinks many will treat the place more as a holiday home.

"We see the target buyers as those who are looking for a weekend retreat. Just like a regular live-aboard cruising boat, these dwellings will be buoyant platforms which are docked and plugged into the electrical grid, water and sewage services."

He said prices were yet to be set.

Plans are for the houses to be tiny, at just 35sq m. A mezzanine floor or loft will maximise floor areas.

Consent has been granted. "It was part of the resource consent obtained to build the marina. We hope to complete the first Boat Shed around April or May next year. What makes our location special is that we own the sea bed. It's part of an integrated marina development plan with an approved resource consent and we have the infrastructure surrounding the location in place."

Mark McGuinness, managing director of Willis Bond which is developing luxury Wynyard Quarter apartments, said the late Sir Ian Athfield had suggested "branches" of floating houses off Wellington's former Overseas Passenger Terminal - now the Clyde Quay Wharf where Willis Bond developed 76 apartments in a $170 million project. But that idea was rejected.

"In practice, it would not work because there were shipping and navigation issues," Mr McGuinness said.

"Anything's possible. But it comes down to cost and detail. I'd question the appropriateness of housing in a marina environment because marinas are for boats."