A major housing development aiming to deliver hundreds of homes within five years has been announced by Auckland Mayor Phil Goff.

Goff said an empty site in Manukau, at 20 Barrowcliffe Place, would be developed into a residential neighbourhood of up to 300 new homes during the next five years.

Council agency Panuku has entered agreements with Te Ākitai Waiohua and the Puhinui Park partnership of the New Zealand Housing Foundation, Te Tumu Kāinga and CORT Community Housing, to build the residential neighbourhood.

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"These homes reflect the changing needs of Aucklanders, with new dwellings catering for single adults through to large families," said Goff.

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The new neighbourhood – Kōtuitui Place – would offer a range of dwellings, from one-bedroom apartments to four-bedroom houses.

At least 50 per cent would be sold under an affordable housing scheme and there would be a range of purchase models, including rent-to-buy and shared equity.

"Auckland Council is absolutely committed to working with Government, NGOs and the private sector to accelerate house-building and the provision of social and affordable houses," Goff said.

Panuku chief executive Roger MacDonald said he was delighted to see the development underway.

"Earthworks started in February and construction is expected to begin later in the year with completion of the homes required within five years," MacDonald said.

"Alongside this housing development, work is already underway to begin transforming Putney Way into a pedestrian-friendly main street for central Manukau. The street design will be the first of its kind for the area."

Goff said the houses planned for the development would be built to a high standard, "in a location close to great amenities, transport links, education and job opportunities".

The development would contribute to the wider regeneration plans for central Manukau.

"The regeneration of central Manukau will be comparable in scale to the award-winning transformation of Wynyard Quarter on the city waterfront. It will create an exciting and reinvigorated heart of the city in the south."

Manurewa Local Board chair Angela Dalton said the development would create jobs and help drive the local economy.

"This is an important first step towards transforming central Manukau into an affordable and sustainable neighbourhood and a hub for learning, leisure and cultural experiences," Dalton said.