A new development at the site of the formerly failed Kawaha Point Villas is set to bring 86 new affordable properties to Rotorua.
Local builders are expected to start construction next week and properties will be available to buyers from as early as March 8.
The project's new developer has rebranded the development as Mountview Green and offers 26 properties on Koutu's Ian St and roughly 60 more properties on a Frank St site across the road.
The three-bedroom and two-bathroom houses will range from standalone, duplex and terraced options - with a portion also reserved for KiwiBuild.
Standard properties will be 125sq m, while KiwiBuild sites will be 96sq m. Most homes will include a garage, open plan living, a master bedroom with ensuite and heat pumps in the living area and ducted heating to the bedrooms.
Prices will sit around the average current Rotorua house value and wil be aimed at both first-home buyers and families.
The new developer and director of Rotowhare Limited Marcus Jacobson has worked on a number of developments in the past and told the Rotorua Daily Post it was "so exciting to be able to move into the regions", especially one where demand was so high and the stock so low.
The site, formerly known as Kawaha Point Villas, was established by FHB Group Limited back in 2017 and plans were for two to three-bedroom houses priced at $499,000.
A number of the lots sold quickly but after more than two years with little work done, FHB Group Ltd was placed into receivership with 12 buyers still stuck in contracts.
Buyers were given the option at the end of last year to terminate - which 10 of them did. Two remaining buyers held on to their contracts at the new site.
Jacobson said the market had moved "significantly" since 2017 and those who chose to stay on with their $499,000 contract would be locking down a decent profit come move-in day.
He said he had received a lot of "oh really?" from locals when told about his plans.
Due to the extensive amount of civil works that had already taken place at the site, council processes were fast-tracked and they did not have to wait around, he said.
Construction was set to start on the Ian St site next week.
"It is coming. The pressure is really on to get things going."
Jacobson said he had the capital to ensure the two-phased development was completed. He planned to look at more sites in the city for further development opportunities.
He said he hired local construction company Tawharau Housing Limited to complete the development because it was vital to have a local builder who knew the area on the ground and local real estate agents Professionals McDowell Real Estate to market them.
"We always wanted to ensure we employed local people and created local opportunities."
Phase one at Ian St was set to be completed in the next six months while the final resource consents were signed off for the 60 properties in the second phase at Frank St.
The Frank St development was expected to be finished by next year.
Jacobson said there had not been many new builds in Rotorua in the past 10 years as developers sometimes avoided the regions due to low bank confidence.
"We saw the vision. The demand is just so high."
Marketing manager of the development Andrea Jacobson said the opportunity of KiwiBuild in the regions was huge because the demand was "so hot" for it in Auckland and it was a chance for more people to benefit from the "value of the programme".
Professionals McDowell Real Estate principal Steve Lovegrove said this development was the "first of its kind" in the city and he expected demand to be "exponential".
"We are scaring ourselves. We are expecting a huge onslaught of buyer interest."
He said the influx of new housing had been something the city had been waiting a "long, long time" for and they were beyond excited to see the result.
The development would have a "dramatic effect" on the Koutu area and would likely "change the perception" for locals, he said.
Being close to State Highway 5, the CBD and the city's entrance would have "wide-ranging benefits" for buyers, he said.
"I admire the courageousness of the developer. He is pioneering something and taking a step of faith in the Rotorua market."
It will be "the flagbearer for the future of Rotorua's real estate marketplace", he said.
Lovegrove said he could not be specific on pricing until they went to market but ensured it would be around the current average property price.
Rotorua's median house price is $600,000.
Harcourts Rotorua agent Hielke Oppers said "any new development is a really good thing" due to the extreme housing shortage the city was seeing.
He said the former development at the Ian St site had been "unique" because they were small lots of land which was not normal for Kiwis. However, he said it was something the city needed to look at to ease pressure on demand.
Rotorua Lakes' Council's group manager of operations Jocelyn Mikaere said housing was a priority for the council and consents were processed "as quickly as possible", working alongside developers to ensure all the required information was provided.
Rotorua mayor Steve Chadwick acknowledged the city was facing a housing crisis "with a shortage of at least 1700 homes and growing, so it's great to see progress on this development and others".
"Housing is a top priority for us and every bit adds up. We look forward to seeing ongoing progress."
The Ian St properties were set to go to market on March 8 and people hoping to inquire further could visit www.mountviewgreen.co.nz.
The NZ sharemarket was steady, while the Nasdaq hit another record high in the US.