Construction of the first homes to be built under the KiwiBuild programme has officially begun.

In what was geared by Labour to be a significant announcement, Minister of Housing and Urban Development Phil Twyford on Saturday morning said construction of 18 homes on former Defence Force land in Papakura had started.

Further homes will be built on the same site.

"I am incredibly proud," Twyford said. "We are delivering on our promise of affordable starter homes for families."

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The houses are billed to be affordable for first home buyers, as the cost of the average home in Auckland is now $1 million.

Stand-alone homes at the McLennan Development site are expected to cost $579,000 for three bedrooms and $649,000 for a four-bedroom.

A ballot system will be open to first home buyers and the build is expected to be completed in August.

"I have been working with Housing New Zealand since late last year on getting the first KiwiBuild homes built at McLennan. Housing New Zealand had been unable to get private developers at an affordable price point. So, we seized the opportunity to build KiwiBuild homes, rather than just watch the grass grow," Twyford said.

"National's plans for unaffordable houses at McLennan fell through. Without KiwiBuild, this land would be sitting empty today. Instead, we are putting up good homes for families to live in.

"Now, as the frames start to go up, is a fitting time to announce these are the first KiwiBuild homes."

Twyford has pledged to deliver 100,000 affordable homes over the next decade, with 1000 of them due to be built in the next year.

The new Government has committed $2 billion into the scheme, which will convert existing Crown land or buy private land to on-sell to developers who commit to delivering affordable homes.

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Earlier this year Twyford announced it had bought nearly 30 hectares of land formerly owned by Unitec's Mount Albert campus, to convert into housing.