Competition from surrounding areas, homes which are too small, too expensive and squashed up like Coronation St yet demanding big deposits.

These are some of the reasons why six affordable high-quality KiwiBuild Wanaka homes haven't sold despite five months of marketing, locals say.

Lyal Cocks, former Queenstown deputy mayor, said the nearby Timsfield, Sentinel Park and Luggate Park all offered plenty of new homes, often cheaper than the KiwiBuild schemes at the 800-residence Northlake where only four out of 10 new KiwiBuild homes have sold since early October.

Read more: Six affordable Wanaka KiwiBuild homes waiting for buyers since October

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"There's a lot of new housing going up very fast," Cocks said citing those three competing areas. All were only 10 to 15 minute's drive from Wanaka, he said.

However Northlake was a different style of urban development and not everyone appreciated that, Cocks said.

"A lot of people in Wanaka can't adjust to smaller places and they think it's like Coronation Street. Everyone says that to me."

Rachel Brown, a Wanaka Community Board member and former chairwoman, said money remained the issue because KiwiBuild was more middle-class welfare than assistance for poorer people.

"There's lots and lots of houses being built," she said, adding that big deposits made it difficult for many Wanaka workers to afford the KiwiBuild places. "The issue is the deposit. A lot of wages here are not high," Brown said.

Sonya Fynmore of Winton, developing the 10 KiwiBuilds in Wanaka, defended the places.

"The properties are targeted at first home buyers and are a similar size to other KiwiBuild properties around New Zealand . Sites for KiwiBuild product at Northlake range from 200sq m in duplexes to 340sq m homes, freestanding," Fynmore said.

Inside a KiwiBuild home at Wanaka. Photo/Winton
Inside a KiwiBuild home at Wanaka. Photo/Winton

Wanaka's median house price was $1,165,000 in December yet KiwiBuild Northlake places started at $565,000 and the most expensive was $640,000, she said.

"There is a diverse range of properties at Northlake, important for any community. Section sizes range from 200sq m to 1000sq m-plus, as well as the original rural residential one acre area.

"The development is supported by a village centre, with café/restaurant, childcare and commercial units, all complete and operational. A hotel, and future retail/commercial is proposed," she said.

Deposits required were only 10 per cent, the same as for any other Northlake home, she said.

More than 300 sections had been sold in three years at the subdivision and more than 200 of these have been titled. About 130 houses are either complete and occupied or underway. Works are continuing for subsequent stages of the subdivision, she said.

"Given the success of the development to date and the recent completion of the Northlake Kiwibuild showhome, we look forward to more buyers securing their Northlake KiwiBuild home," she said.

Ignite Wanaka Chamber of Commerce surveyed members about affordable housing and whether that was a barrier to recruiting staff.

Off-the-plans marketing for KiwiBuild Wanaka. Photo/supplied
Off-the-plans marketing for KiwiBuild Wanaka. Photo/supplied

Almost 73 per cent said affordability of housing for staff was their main issue around staff housing, with the availability of both short and long-term accommodation being of equal concern to members, results found.

Around 15 per cent of businesses said they had invested in accommodation for their staff in the last 12 months and 17 per cent said they'd consider buying or renting accommodation for staff in the next 6 months if the need arose.

Critics took to social media about Northlake, claiming residents were getting a huge hotel and bus park instead small village of services and facilities.

KiwiBuild says eight homes are now under construction at Northlake and seven have been completed. Prospective buyers of the other six homes on Mt Burke St, Mount Linton Ave, Merivale Ave and Glen Dene Cres are being asked to visit a show home or contact sales agent Scott McCoun of Bayleys.

McCoun declined to talk about Northlake.

Clint Smith, a KiwiBuild spokesman said "as with all property sales, some of the time purchases don't end up being completed" but for privacy reasons, he declined to say why sales did not go ahead.

The 10 homes were initially offered in a ballot but did not sell.