Twelve new family homes are expected to begin construction at Mangatawa next year thanks to a $2.6million grant from the Government's Social Housing Unit.

The Government's grant will go towards building a total of 20 large family homes on the Mangatawa Papakainga estate owned by Maori trust Mangatawa Papamoa Blocks Incorporation.

Mangatawa Papakainga resident Ngataierua Thomas and Mangatawa Papamoa Blocks Incorporated trustee Victoria Kingi look at plans for the development of new homes.

The development, aimed at providing affordable homes for Maori, will be built on trust owned land worth $2.5million at the end of Truman Lane. It is the final stage in a 36-home development.

Incorporation trustee Victoria Kingi says the response from families wanting to sign up to the project is overwhelming.

It provides the hope of home ownership to many who cannot afford to buy in Tauranga.

'Affordability is an issue for everybody, right across the board,” says Victoria.

'We are hearing it all the time. Tauranga is the fourth most expensive place to buy in. The average house here costs 5.9 times the average salary of $60,000.

'Our stats show that the average salary of $30,000 for Maori. So for Maori it costs 11 times their annual salary to buy in the general market.

'The solution for us is to look at using our Maori land, which for us makes the whole project a lot more affordable. The land is often being contributed at no cost and so the cost is really for the housing and infrastructure. If we added in the land the cost would probably be another $200,000 per house.”

Mangatawa members or beneficiaries from Nga Potiki iwi are eligible for the housing.

'The criteria is you have to be in housing need, low income. If you are going to be renting we would be looking at your financial situation - you are going to have to need an affordable home.”

Victoria says the housing development is for Maori and built on Maori land.

'We are getting off our butts. We are putting our hand in our pocket and we are helping our people.”

'We are putting in 50 per cent, and we are doing it so our shareholders and beneficiaries who need homes can benefit from it.”

The grant comes from the government social housing unit Te Wahanga Kainga Papori, which works with organisations that provide social and affordable housing, including not-for-profit, iwi, and private sector providers.

Nationally the fund is allocated $104million from 2012-15. The Mangatawa grant represents 2.5 per cent of the total fund and comes from the Putea Maori fund, which sets aside $13million for developing Maori freehold or reserve land for housing.

The initial build will be 12 homes with infrastructure for 20. All houses will be family homes of four bedrooms or more, and all will be reticulated.

The houses will probably be standard designs at this stage, says Victoria, but they may include water tanks.

The trust installed a pumping station for the development in 2010 for the wastewater and stormwater.

'We've got a housing situation and we are looking for solutions to address it. We could be using that land for other things to make more money for the trust, but it really is along the lines of not for profit.

'So it's a good story for us, and a logical development of what we have been doing.”

When the development is complete the trust will have used all the permitted space in the papakainga zone at Mangatawa.

'That permits 36 dwellings,” says Victoria. 'So we would have used that up. So that's us, we are finished there. Probably if there is any further housing, it would be in our residential zoned land down in Papamoa.”

The trust is looking at starting construction in 2014, and building 20 homes over 24-36 months. The first families are expected to move into their new homes in about a year.

Mangatawa Papamoa is very grateful for the opportunity to be working with the Government to meet beneficiary housing needs, says Victoria.

The housing affordability figures come from the 2013 9th Annual Demographia International Housing Affordability Survey which covers 337 urban markets.

It divides the median house price by the gross annual median household income to determine how affordable housing is. In affordable and normal housing markets, house prices do not exceed 3times annual household incomes. The survey rates affordability as severely unaffordable at 5.1 and over, seriously unaffordable at 4.1 to 5.0 and moderately unaffordable at 3.1 to 4.0.

A level over 5.1 indicates there are political and regulatory impediments to the supply of new housing that need to be dealt with, the survey authors say.

Auckland is the least affordable NZ market, with a median multiple of 6.7; Christchurch rated 6.6, Tauranga-Western Bay of Plenty 5.9, Wellington 5.4, and Dunedin 5.1, also rate as severely unaffordable.

Three metropolitan areas were "seriously unaffordable": Palmerston North 4.4, Napier-Hastings 4.5 and Hamilton 4.7.

New Zealand has no affordable markets and no moderately unaffordable markets, the survey shows.