Sections at the 18-lot Rosebank Tce subdivision, which adjoins the Clutha District Council’s Balclutha headquarters, went on sale late last year, and range from 633sq m to 888sq m.
Council chief executive Steve Hill said the sections, which sit around the $150,000 mark, did not yet have titles, but were attracting good early interest.
Three sale and purchase agreements were already in place, he said.
The subdivision was rates-neutral, and its $2.4 million cost would be funded "from future sales".
Mr Hill said the council was confident it would recoup those costs, despite the advent of a more challenging economic climate since the project began in 2022.
"[We would need to sell] all sections because we are only selling them at prices to recover the budgeted cost. The budgets include financing costs over a period, so they don’t have to sell immediately. Council is confident there is demand for sections still and we have allowed time for sales to eventuate."
He said other council developments, in Stirling and in Keithmore Rd, Balclutha, would be "on hold" until a clearer picture of demand emerged.
"We have two potential developments on hold, pending the uptake and demand from Rosebank Tce. Rosebank Industrial Park just has one section left.
"Given they are rates-neutral the only issue is whether there still exists demand and whether private development can pick up the developments. In these challenging times it is easier for a council to develop than it is for developers because it doesn’t have to make a return above cost-neutral, and doesn’t pay tax. Whenever private development picks up the role of multi-lot development within the district, the council is happy to step aside, as it has in Milton, for example."
Milton developer Andrew Clark is developing the 89-section Springwell Rise subdivision at Tokoiti, on the outskirts of Milton.
In 2021, the council sold out its 73-section Plantation Heights development in Balclutha.
This was illustrative of an ongoing demand for new sections in South Otago, Clutha District Mayor Bryan Cadogan said.
"The council’s initiative to take a proactive approach to development has been one of the cornerstones of our ‘living and working’ strategy, and has been instrumental in transforming our district’s population trajectory and vibrancy while creating an enlarged ratepayer base.
"From a purely financial perspective we hope that, just like our successful venture at Plantation Heights, this subdivision will boost apprenticeships and impetus to our building sector while providing locals with the opportunity to prosper and contribute to our vibrant district, at no cost to the ratepayer."
