The Government is interested in a plan to build a new satellite city in South Auckland capable of eventually housing 500,000 people.

Housing Minister Phil Twyford told the Herald today he is very interested in work being done by Infrastructure New Zealand for a satellite city centred round the small settlement of Paerata where Wesley College is situated, just north of Pukekohe.

Infrastructure New Zealand chief executive Stephen Selwood said the city could eventually extend northwest to Karaka and across the Pahurehure Inlet to Weymouth.

A discussion document from Infrastructure New Zealand says land around the rail line at Paerata could initially add 30,000 homes on unzoned land priced for $450,000.

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By 2050, the new city could have tens of thousands of homes serving a population of 500,000 people within 30 minutes of central Auckland, including non-stop rail services and modern trams to the airport.

Selwood said Infrastructure New Zealand looked at five locations in Auckland with sufficient land to support a city of 100,000 residents and found the south represented the best opportunity to grow the city affordably and efficiently.

Twyford is interested in the Paerata concept as part of Labour's $2 billion KiwiBuild scheme plan to build 100,000 affordable homes over the next 10 years, half of which will be in Auckland.

Labour has identified Hobsonville Point as the model for building affordable homes at scale with Twyford saying Henderson and Manukau are among the 10 to 15 locations in which to build high quality, affordable new residences in Auckland.

Auckland Mayor Phil Goff will travel to Wellington this week to hold his first talks with the new Government. He will meet Prime Minister Jacinda Ardern, Finance Minister Grant Robertson and Twyford.

The talks will be the start of a conversation on a "New Deal for Auckland", Twyford said.

"It will be a really ambitious programme of work to get Auckland moving and that includes a huge investment in transport, building 50,000 affordable homes and 10 to 15 large scale urban developments."

He plans to set up an urban development authority, to be known as the Housing Commission, to oversee large scale developments and leverage off the Government's balance sheet.

Why Paerata?

Close to industrial land at Drury

Close to employment centres at Manukau and Auckland Airport

Close to Waikato and Bay of Plenty growth areas

Water, power and aggregate supplies comes from the south

Located on a rail line

Tens of thousands of homes within 30 minutes of downtown Auckland

Houses could be built for $450,000

*According to Infrastructure New Zealand discussion document