Some of the sections have views of the mountains and Lake Taupō's western bays and those along the sides and the back of the subdivision have permission to build two-storey dwellings.
Mr Campbell said the covenants on the subdivision were "pretty reasonable", including height, colour, aspect and house size, plus general council conditions and there would be a reserve along both sides.
A walkway under Lake Terrace and Pukenamu Rd will connect the new subdivision with the lakefront reserve at Secombe Park.
Mr Campbell said the demand showed there was a market for larger sections, which were in short supply around Taupō and the market had well and truly picked up.
He said while some builders were expected to on-sell as home and land packages, other buyers were looking for both holiday homes and permanent homes, and they were being sought by both locals and out-of-towners looking to move to Taupō, with some possibly commuting to Auckland because of the proximity to the airport.
Meanwhile the Taupō District Council has been asking for expressions of interest from developers for two pieces of land it has south of Taupō.
The first is between Richmond Heights and the new Lake Terrace subdivision, and the other is next to the airport roundabout.
Council commercial manager Flash Sandham says council owns a large 197ha parcel of land known as the East Urban Lands which stretches from Lake Terrace to Napier Rd and runs along the back of Richmond Heights and Waipahihi Botanical Gardens.
Part of it has already been developed as the Botanical Heights and Tauhara Ridge subdivisions.
Most is zoned for residential apart from a 1ha parcel near the airport roundabout zoned rural.
There is space for 2200 sections but the land is unserviced, with no sewerage, electricity or water, and the council is looking for developers.
"We've had a good response to the expressions of interest that closed in October - we got half a dozen responses," Mr Sandham said.
He said the next step was to go through the expressions of interest and go from there.
While the Taupō East Urban Lands plan was prepared in 2006, development of the land slowed after the global financial crisis hit in 2008 and has only recently resumed.