Housing New Zealand is seeking a private partner to build houses on former Papakura army camp land.

Earthworks for Auckland's biggest low-cost housing development in 25 years will start next month on land that used to be part of the Papakura army base.

Housing New Zealand is seeking a private sector partner to build between 450 and 500 homes on the 24ha site between Walters Rd and McLennan Park. Tenders close on October 16.

Its general manager of asset development, Sean Bignell, said the homes would be a mix of 10 per cent state houses, 20 per cent other social housing and 70 per cent for private sale at prices likely to be "in the high 200s to the high 300s" - putting most of them below the lower quartile mark of Auckland residential properties sold this year.

Finance Minister Bill English said recently that high land prices had skewed Auckland builders towards large, high-value houses, and there was "no housing being built for people in the lowest quartile of income".


"That is clearly unsustainable," he said.

A start on the Papakura project comes as Housing NZ bows out of another long-planned 10ha development next to the Weymouth child welfare home, which the new Social Housing Unit in the Ministry of Business, Innovation and Employment has allocated to "third-sector" social and affordable housing.

The NZ Housing Foundation, which has built shared-equity housing in other parts of Auckland, is believed to be assembling a proposal for what may be 300 to 350 homes.

Auckland Community Housing Network co-ordinator Charles MacCulloch said his members had been asked how many homes each might want in the project.

The Community of Refuge Trust, a mental health provider, was interested in 10 to 20 units.

The Social Housing Unit has allocated $21 million for Auckland providers over the next three years plus $25 million for "specific larger developments and/or possible asset transfer initiatives" which may include Weymouth.

Iwi belonging to the Tamaki Collective, which signed a historic settlement with the Government last month, may also contribute capital for land and development.

"In relation to Weymouth we have an opportunity to be involved and we do want to be involved in a housing development for affordable and social housing," said Tamaki Collective chairman Paul Majurey.


"We are talking to a whole range of folk - those with expertise in social and affordable housing, those with expertise in building, those with expertise in equity finance."

Mr Bignell said earthworks on the Papakura site would start next month and the first houses would be built next year.

Housing NZ's 2012 statement of intent said it planned to sell more state houses than it builds or buys over the three years to 2015-16 to build up money to invest in the following six years.

Over the next five years it plans to sell 1850 houses in Auckland and build or buy 3270, adding a net 1420 homes.

Mr Bignell said the number of Auckland state houses "has gone down a little bit this year" and funding released from those sales was now ready to go into new projects.

"We are now looking to get more homes under way."

Cheap homes

*450-500 homes.

*Work starts next month.


*300-350 homes.

*Negotiations under way.