Home builder and developer Mike Greer is set to build more than 100 KiwiBuild homes in West Auckland and Christchurch.
The agreement to build 104 homes includes the first in Canterbury - and the cheapest KiwiBuild announced so far: 11 two-bedroom standalone homes in Kaiapoi for $360,000 each.
Other homes will be built in Huapai, Whenuapai, Pukekohe, Kaiapoi, Rolleston, Pegasus, Woodend, Rangiora, Halswell, Marshland and Spreydon.
They will be completed between now and mid-2020 and will be a mix of two and three-bedroom, standalone and terraced homes, ranging from $360,000 to $650,000.
Housing and Urban Development Minister Phil Twyford announced the new partnership today.
The agreement teamed KiwiBuild with one of New Zealand's largest residential construction firms, he said.
"This agreement with one of New Zealand's premier home-building firms shows KiwiBuild is gathering momentum. I hope these 104 homes will be just the first of many we will build with Mike Greer over the coming years."
The announcement comes as the Government hopes to breathe new life into a programme beset by criticism after it failed to meet its target build numbers for its first year.
Reserve Bank Governor Adrian Orr last week warned that the Government's flagship KiwiBuild policy will have a significant "crowding out" impact on the private sector.
A discussion document published by the Reserve Bank projected KiwiBuild would create an additional 7100 – 14,200 homes in New Zealand by 2022, above what was already expected.
"While KiwiBuild is assumed to contribute 100,000 affordable houses over 10 years, it is unlikely that this will be achieved without crowding out a significant amount of other residential construction activity," the paper said.
It also comes as the Government has struggled to sell some KiwiBuild homes, most notably in Wanaka.
Twyford said the Government had spent many months working out the deal with Mike Greer, while the company continued work building the homes.
This meant some home were ready to sell now, and "I look forward to seeing families moving into these KiwiBuild homes here in the North West," he said.
National's housing and urban development spokeswoman Judith Collins said Mike Greer would be delighted with Twyford's announcement.
"He [Twyford] has given them a massive big bonus because he has underwritten all these houses that they're going to build."
Company founder Mike Greer told reporters he was already negotiating a deal for a further 100 KiwiBuild homes with the Government.
Twyford said he was also aware of other large KiwiBuild agreements with big developers that were being finalised.
"These deals have taken longer than I hoped to conclude, but we're starting to see really good progress," he said.
He defended KiwiBuild against attacks that it was behind schedule and not popular with buyers.
"We've had some teething troubles in the first few months of the programme," he said.
"But this is a massive 10-year programme ... and I have no doubt we can turn this around and build our way out of the national housing crisis."
He said the Government would do this by partnering with developers, setting up a special authority to cut through red tape on large-scale developments, reforming planning laws and better financing important infrastructure projects.
Greer said first-home buyers were often cautious when purchasing houses and wanted to "see, feel and touch" first.
For this reason, the company would only market its homes for sale once they were already completed and open for inspection.
He also said the Government's financial backing gave developers more confidence to build "affordable and healthy" homes.
Homes priced in the $300,000, such as those being built in Christchurch were very rare in today's market, he said.
Twyford said that before KiwiBuild started, only 5 per cent of new builds were in an affordable price range.
"We're all about working with developers, like Mike Greer, to get affordable homes built. They simply weren't being built and haven't been built over the last decade," he said.