The Government has announced the first special housing area for Queenstown.
Building and Housing Minister Nick Smith said the 38-hectare site near Lake Hayes had the potential for 150 new homes.
He said 64 sections or house and land packages have already been pre-sold, and about 80 percent of the house and land packages have been priced at or below $450,000.
Dr Smith said Queenstown had the worst housing affordability in the country because insufficient land had been made available for housing and too few homes have been built in an accessible price range for young families and first home buyers.
The minister said that, according to census data, home ownership in the area amongst people aged under 40 had dropped by a staggering 33 percent since 2001.
He said the median multiple of house price to income in Queenstown was 8.9 as compared to 8.4 in Auckland and 5.5 nationally.
The Government added Queenstown to the Housing Accords and Special Housing Areas Act, which aims to improve housing affordability, in mid-2014.