A Queenstown community housing trust helping people into affordable homes says KiwiBuild houses in Wanaka are overpriced compared to what's available on the open market.
As the Government announced it's so-called KiwiBuild reset this week, Wanaka was cited as part of the problem, with little demand from first home buyers for houses that have been built there under the scheme.
Seven Sharp reported on a KiwiBuild house in Wanaka that would cost $645,000.
The Queenstown District Community Housing Trust provides assistance for qualifying residents to get into affordable housing.
The Wanaka KiwiBuild houses have been hard to sell and Julie Scott of the trust says they're too expensive.
"They're a little bit overpriced for what they are in terms of their value compared to what's available on the open market," she said.
There are genuine first buyers in the area, Ms Scott said.
"They're all sorts. There's teachers, nurses, police, tradespeople, bar staff, retail management - everyone who's on pretty much less than a hundred thousand household income."
Real Estate Institute of New Zealand CEO Bindi Norwell said there are too many restrictions on the criteria to buy the KiwiBuild houses.
"And so I guess that's really prevented people from actually getting into the market and buying those properties," she said.
Northlake is a busy KiwiBuild development in Wanaka and the Government plans to sell more than 200 homes in the subdivision.
But to do that, they've had to change the terms.
"So they've reduced the deposit amount from 10 per cent to five per cent," Ms Norwell explained.
"They've also removed the ban of having multiple parties purchase them. So you can actually go and purchase a property with someone else you know, which is great."
Also, the amount of time you have to live in the property has been reduced, she said.
"So originally it was around three years. But for one bedroom and studio apartments now it only has to be one year. So this will help people as well."
Prime Minister Jacinda Ardern said earlier in the week, the changes were "an acknowledgment that we have a handful of areas where decisions were made to build houses that, whilst there may have been demand for those houses, there wasn't demand from first home buyers".
Bindi Norwell of REINZ told Seven Sharp there are first home buyers out there who want to get onto the property market.
"But if you make the restrictions too hard and the criteria too high for people, well they can't actually buy that property."
So is KiwiBuild still viable in a place like Wanaka?
"I think if we all work together - government side, developers out there as well and infrastructure providers to actually try and make this happen, I think we can do it," Ms Norwell said.
Julie Scott said: "I think there is an opportunity for the stars to align and for that to happen, yeah absolutely."