For weeks, the lack of sales of KiwiBuild houses in Wanaka has been used by opponents of the Government scheme as ammunition against it.

Now, as Mark Price reports, there is a claim the lack of KiwiBuild sales - five of the 10 built so far have been sold - is affecting confidence in the Wanaka housing market.

Slow sales of KiwiBuild homes in Wanaka are giving the false impression the Wanaka housing market has gone "off the boil'', according to Wanaka developer David Reid.

Reid was earlier this week showing members of the Queenstown Lakes Community Housing Trust the location of the 28 lots in his Bright Sky special housing area to be donated to the trust to use for affordable homes.

While discussing KiwiBuild - and the sale of five of 10 KiwiBuild homes in the Northlake subdivision - Reid said the lack of sales had affected other developers' plans for Wanaka.

"We've had a large group-building company looking at a fairly major project down here who have been advised not to go ahead with it because they were told KiwiBuild failed here - therefore the market is going off in Wanaka, which is not the case at all.''

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Reid said it was important for developers to provide what the market wanted, and he was still modelling his 281-lot subdivision.

"When we started our development, we thought everyone wanted bigger sites and they wanted room for their gardening and their sheds and their boats.

"That's not the case.

"We ended up re-defining our own subdivision and putting in a mix of smaller sections along with what you could call standard 600sqm to 800sqm sections because that was what the market was crying out for.

"I don't say we get it right all the time, but if we are listening to our clients and we can adapt to what they want, then we are actually delivering what they want and it makes it easier to make sales.

"It's not rocket science.''

Bright Sky will provide the infrastructure costs for the 28 houses to be built by the trust.

The trust has 600 families on its waiting list for affordable homes, of which about 20 per cent are in the Wanaka area.

Northlake developer's view

Asked to respond to Reid's comments, Northlake developer Chris Meehan, who is chief executive of Winton said:

"We were surprised by your email yesterday and that anyone could draw those conclusions on the Wanaka market - it is not what we have heard and is certainly not the case at Northlake, given:

Northlake has built and titled over 200 lots in the last two years, 150 of them have been or are being built on currently.

65 residential lots will be constructed this year - all but one of which are pre-sold.

Where completed homes are being sold, they are achieving good prices - the Northlake Home series houses are consistently selling for approximately $800K and recently a Rocklands Court property sold for almost $1.2 million.

Facilities including childcare, retail space and a bar/restaurant to the tune of $10m have recently been completed at Northlake, again, by a national building company.

Any impressions of a cooling market are not being felt this side of Wanaka.

We agree compact housing at an achievable price point is what an increasing portion of the market demands - whether that be first home buyers or other buyers.

The range of housing product at Northlake is designed to provide purchasers with choice. Kiwibuild is part of that choice, and we are hopeful that a further streamlined process will lead to further sales.''

A spokesman for KiwiBuild said:

"The first 10 KiwiBuild homes in Wanaka have only just been completed and five of them have been sold already.

"Families are moving in and we expect sales to continue. Wanaka is a growing community that needs affordable housing.''