At least 500 of the homes being built at Auckland's Hobsonville Point will cost less than $500,000, Housing Minister Phil Heatley has announced.
As many as 3,000 new homes will eventually be built at the site, a former air force base. The first residents moved into the site earlier this year.
In 2009, Heatley said that up to 100 homes at the development would be set aside for first-time buyers under the Gateway Housing plan.
But in May, it was announced that only 17 homes would be included under the plan. Heatley said this was because lower interest rates made it easier for people on low incomes to get a mortgage.
Today, Heatley announced a new scheme to inject more low-cost homes at the development.
"Twenty percent of the 2,500-3,000 new homes at Hobsonville Point will be priced at $485,000 or less. This means 500 to 600 more affordable homes will be built in this Auckland development alone," Heatley said today.
Ten percent of these would be sold for less than $400,000 and another 10% would be priced between $400,000 and $485,000, Heatley said.
He said these prices were "more affordable in the Auckland context".
Labour Party housing spokesperson Annette King called the new scheme "half-hearted".
"Phil Heatley's announcement of just 600 new affordable homes in one part of Auckland is underwhelming, to say the least," she said.
"It's just a fraction of what's needed."
Green Party housing spokesperson Holly Walker said the homes would still be unaffordable for typical Auckland families, let alone those on low incomes.
"Half a million dollars for a house might be 'affordable' on Planet Key, but it is far out of reach for most New Zealand families," said Walker.
The new scheme is being introduced by the developer, the Hobsonville Land Company, a subsidiary of Housing New Zealand.
It is up to the company how it achieves the targets, Heatley said.
"To protect taxpayers, the project's lifespan will be determined by market conditions and the need to achieve a reasonable rate of return on the taxpayer's investment.
Heatley said Auckland Council had been very supportive of ideas to build more affordable houses at Hobsonville Point.
There have been estimates that 400,000 new homes need to be built in Auckland over the next 30 years to keep up with projected population growth.