Tourist mecca development swimming against the tide

An artist's impression of housing in the Five Mile township development near Queenstown.

A new $2 billion township near Queenstown is set to change the face of the exclusive tourist mecca by providing a large base for tertiary study and affordable housing for residents priced out of the market.

Work on the first 8ha stage of the 33ha Five Mile township, led by Christchurch developer Dave Henderson, will begin in March.

"Because Five Mile sits at the entrance to Queenstown, it is critical for us and the community to establish a high standard of urban design and architectural finish," Mr Henderson said.

"Our goal is to make Five Mile the most attractive and practical town in New Zealand. The town is intended to be broad in its appeal, as every good town should have a mix of students and seniors in it."

An Australian-based company, Terrace Towers, had tried to get development rights on the land for about 17 years. It sold it to Mr Henderson's company two years ago.

Queenstown Lakes Mayor Clive Geddes is fully behind the new township, which he expects will add "something quite special" to the Central Lakes Region.

"Every time there has been a major development ... the [house] prices have continued to go up.

"However this particular developer has some very clear views on his responsibilities in regard to affordability," Mr Geddes said.

The Central Lakes Region, encompassing Queenstown and Wanaka, recently overtook Auckland as the least affordable region to buy a home in New Zealand.

Mr Henderson said improving affordability was a key issue for him.

"We will have quite a strong mix of residential types and it is our plan and determination that a good number will be certainly very affordable housing."

The tertiary campus would be an "umbrella" of opportunities for university and polytechnic studies, as well as study offered to overseas students.

"It has huge potential as a place to be educated in," Mr Henderson said.

"The key to do that is affordable student accommodation.

"Students bring a lot of colour and energy and life to any district."

Mr Geddes predicted there would be huge interest in people wanting to study while enjoying the Queenstown lifestyle.

"There would be no better place in New Zealand to start your career in the hospitality industry than by getting into an earn-and-learn package in Queenstown."

Mr Henderson hopes to have the town completed within 15 years.

Town planning

* What: Mile township

* Where: be built on farmland at Frankton near Queenstown Airport.

* Facilities Housing for up to 10,000 residents.

* A large shopping area.

* Accommodation for students, workers and travellers.

* A tertiary study campus for up to 3000 students.

* A church and a four-star hotel.