After decades of planning, the development of the Peacocke suburb is set to get under way after the city council gave the project a final tick of approval.

Houses could start coming on the market in five years as council agreed in principle to accept a Housing Infrastructure Fund loan from the Government and gave authority to HCC chief executive Richard Briggs to sign the final agreement.

The council secured $290.4 million from the fund, comprising $180.3m of a 10-year interest free loan, and $110.1m of NZ Transport Agency subsidies.

Peacocke has the capacity for 3750 homes within the next 10 years and 8400 across 30 years, while a new bridge over Waikato River from the Wairere Drive extension will be built near Hamilton Gardens.

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Not all councillors were for the development, as councillor Mark Bunting, who has had a cautious approach to the Peacocke's development throughout the 10-year plan discussions, withdrew his support for the project.

"I really hope my kids get to hear this, because it is for them and about them," Mr Bunting said.

"My dream for Hamilton is a happy and healthy Hamilton," he said.

"If you look at anything that is happy and healthy, it grows up tall and strong with a big heart. Healthy things don't grow out too fast."

Mr Bunting referenced what he stood for in his election campaign, which was for the city to grow up and not out.

"As we get to this point, it does not feel right as it is too much debt.
"I have three beautiful proud Hamilton children, and I've always told them to hold their head up high.

"Today kids, Dad is heeding his own advice."

Councillor Dave Macpherson responded to councillor Bunting's debate, asking him if he would want his kids to be well balanced as well as tall.

"One of the really important things you do in council is you try and stick to the deals and promises you made, in 1989 when a very young councillor Martin Gallagher was on council, they promised to develop Peacocke," Mr Macpherson said.

Mr Bunting's comments were enough to change the mind of councillor Leo Tooman, who said councillor Bunting was on the right track.

"I just wonder how many houses do we need, everyone tells me we have a housing shortage, and yet I go to Wairere Drive and I see all these house and land packages for sale," Mr Tooman said.

Councillor Garry Mallett said they should never have had to borrow money from the Government, and blamed poor council decisions in the past.

"I wish we had applied a greater and stronger approach to reducing our expenses," Mr Mallett said.

"We would had been in a situation where we would have only needed half this loan."
Mayor Andrew King said it was a priceless opportunity for the city, and hailed the new Government for honouring the HIF.

"This will open Peacocke up to 8000 houses, this is a proper business model," Mr King said.

"This is the best deal that I understand has ever been done between Government and council."

Mr King pointed to general manager city infrastructure Chris Allen who will be one of the leaders of the project.

"You are going to be like a pig in poo, go and make it happen Chris."

The loan will be paid off in 2038 with 90 per cent of the money coming from development contributions, while rates will cover the remaining 10 per cent.

Mr King, Mr Gallagher, and councillors Angela O'Leary, Paula Southgate, Rob Pascoe, Geoff Taylor, Ryan Hamilton, Macpherson and Mallett were in support.

Councillors James Casson, Siggi Henry, Tooman and Bunting were against.