The amount of social and state housing planned for a Housing New Zealand project in Papakura has been halved.
State housing (file photo). Photo: RNZ / Teresa Cowie
The state agency bought the former army land in 2004 for $10.7 million, but the land value has more than doubled and no houses have yet been built.
It originally earmarked 10 percent of the development for state houses, 20 percent for other social housing and the rest for private sale.
But its general manager for asset development, Leonie Freeman, said the overall state and social housing mix was now 15 percent.
"The 15 percent of the properties will either be owned by Housing New Zealand, or if some of the community housing providers or social housing providers want to be involved, that's it too."
The private houses being built on the land were now likely to cost more too, she said.
About 120 of the 600 houses that will eventually be built had been earmarked as affordable homes under the Government's HomeStart programme.
The agency said in 2012 it expected those homes to sell in the late $200,000-$300,000 range.
But that was unrealistic, Ms Freeman said.
"The figures that they've come up with in terms of the HomeStart is to sell under $550,000, and that includes land and buildings and everything else like that. I think it's pretty difficult at the moment in Auckland to get a house for $200 or $300,000 dollars."
Housing New Zealand expected the development to be completed over about five years, she said.
Listen to full interview with Leonie Freeman on Nine to Noon
Meanwhile, it has emerged demand for affordable homes at the state-owned Hobsonville Point development is so high a ballot system has had to be used.
Prime Minister John Key said beautiful new homes at the development in his electorate were available for under half a million dollars.
The development's website showed only two of 38 available homes are in that price bracket, and both are one-bedroom apartments.
Hobsonville Land Company chief executive Chris Aitken said the Axis series of homes for first-home buyers were in such demand there was a waiting list of hopeful buyers who then go into a ballot.
Mr Aitken said they were beating the target of 20 percent of new homes being under $485,000, including apartments and smaller two- or three-bedroom places.