Work will start at the end of this year on a new up-market Rotorua subdivision with 89 sections - and the mayor says there will be more subdivisions to come.

The subdivision, on the Sunny Downs Farm that borders the western side of Rotorua off Pukehangi Rd, will have 72 large sections and 17 lifestyle blocks.

The subdivision, which will be known as Sunny Downs, has been a long time in the making but has just been given resource consent.

Work will start on the land in spring and it was hoped to have sections on the market by early next year.

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The farm is locally owned and the owners will drive the development.

The 16ha subdivision is just the first stage of more developments planned in years to come on the entire farm, which totals 606ha.

A spokesman for the group, who didn't want to be named at this stage, said the subdivision was incredibly exciting for Rotorua.

He said it opened up elevated and north and northeast facing land that had "views to die for".

The Sunny Downs subdivision will eventually cover 80ha. Stage one, which is the 16ha that has been given consent, will cover from the border of Parklands Estate on farmland that stretches along Pukehangi Rd to about where the poplar trees start, opposite near the intersection of Barraud Pl.

The rest of the subdivision, which will be developed in years to come, runs along the farmland to the Mangakakahi Stream, which flows down to the dip in Pukehangi Rd between the intersections of Edward Payton Grove and Caulfield Pl.

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The development will be a standard subdivision with roading and other infrastructure under the control of the Rotorua Lakes Council.

He said the residential sections would be around 700sq m to 800sq m with a few a bit smaller. The lifestyle blocks would be 4000sq m and would sit at the top of the hill, or what is known as the caldera rim that was the former level of Lake Rotorua many years ago.

He said he was aware Rotorua had issues with land locking, which had in the past couple of years prevented Rotorua from progressing with new housing developments but his group had not been sitting on the land and waiting.

"We are definitely not in that realm. It's taken four-and-a-half years just to have this land changed from rural title to future development title.

"We have wanted to do it but haven't needed to do it. Because of the consent process that has not been possible (to do it sooner) but we are here now."

They had already fielded many calls from not only prospective section buyers wanting to give them deposits but land agents wanting to sell them, the spokesman said.

He hoped once the earthworks and civil engineering began in September or October the process would not take long.

"Whatever we do, we have to do it right and we don't want to rush it."

Demand for more sections in Rotorua has been a hotly debated topic and builders have repeatedly said the lack of sections in Rotorua has caused issues because people wanting to build new homes are struggling to find land.

A month ago 24 new sections hit the market at the Baxendale subdivision. It includes 10 sections bordering the Utuhina Stream. Three of the lots are accessed off Pukehangi Rd while the remaining 21 come off Baxendale Drive.

Beth Millard, from Bayleys Rotorua, said the sections would be auctioned on May 18 with no pre-sales before then. The response had exceeded expectations, she said.

She said there had already been 52 official inspections but there were also many people taking a look themselves.

She said available sections were like "hen's teeth" in Rotorua so interest was strong.

Rotorua mayor Steve Chadwick said the Sunny Downs development was "good news" that would give other developers and investors the confidence to proceed.

"We know we have growth pressures and a housing shortage so we do need more and there is the substantial potential for further residential development in Rotorua," she said.

"There is more to come but it can't happen overnight. The timing is up to the landowners and developers who decide when the conditions and time are right time for them, subject to any constraints that might apply."

She said the council's consenting team was seeing a lot of interest in developing, with strong interest in both residential and rural residential sectors.

"A number of multi-lot subdivisions have been approved during the past six months which developers will announce when they're ready."

She said staff were also processing an increasing number of smaller infill subdivisions in residential areas and lifestyle lot subdivisions in rural areas.

Sunny Downs subdivision
- Stage 1, 16ha on farmland off Pukehangi Rd from Parklands Estate's border to Mangakakahi Stream
- 72 residential sections varying 700sq m to 800sq m
- 17 lifestyle blocks about 4000sq m
- Resource consent granted
- Work to start in September/October
- Sections aim to go on the market by early next year