New Plymouth real estate agents say they do not expect properties in a Kiwibuild development in the city to sell quickly.
They said prospective buyers would be balancing reservations about the location in Marfell - which has a median house price of $330,000 - and the attraction of owning a brand new home costing a maximum of $450,000.
Builders are putting the finishing touches to the first 27 properties at the Discovery Place development, which Kiwibuild said would be ready for sale "in the coming months" while the remaining 41 homes in the $23 million project were expected to be finished by the middle of the year.
Housing New Zealand demolished 28 neglected properties on the Marfell site in 2008, and forced 20 families to move out in 2012 to make way for a development that did not materialise.
In 2017, more abandoned state homes were bulldozed after mobs stripped them of anything of worth.
The Kiwibuild development has been promoted as a way of rejuvenating the whole neighbourhood.
Real Estate Institute Taranaki ambassador Garry Malcolm said pricing would be crucial to the Marfell project's success.
"It's going to be a matter of who wants to live in that location - and that's not being disrespectful to the location because there's a mixture of people who live up there.
"I don't think that's going to have a major impact but there may be some buyers that are put off by that location and that's what I'm saying about the pricing structure, it will need to be priced to attract buyers to that area."
Malcolm said if the properties could revert to state housing if they did not sell.
"If there's not a huge rush on them because of the price situation right now you'll find that in time the market will catch up with it and those properties will come to meet the market - or like in some areas in New Zealand those properties will be rented out or sold back to state housing."
Malcolm said the lure of a brand new build could overcome people's reservations about the neighbourhood, a point that was echoed by another real estate insider, who did want to be identified.
"If you're a first home buyer and you are looking at $400,000 plus are you happy to go into a brand new home that's going to be insulated and low maintenance or are you going to go into a 1950s-style weatherboard home that is probably not fully insulated and needs maintenance. That's probably where the balancing act is."
The senior agent said he thought there would be buyers out there.
"I think eventually there will. I think probably it will probably take a while for it to happen. We are still getting good demand from first home buyers and prices have crept up so yeah I think there will be buyers for them. How many is probably the key and how long will it take?"
In New Plymouth there were mixed views on the development.
Gloriana Wilson, who was out shopping with her mother Patricia and toddler Michael, is a recent first home buyer and said she and her partner had decided to look elsewhere.
"We've just actually just finished buying so we did think about it, but I think for us there was probably a bit too much stigma about what's kinda happening in the area. As far as it went we were almost happier spending the same amount of money in different neighbourhood."
Her mother Patricia lived near the new development, and said she had issues with its design.
"I think the houses are too close together and I mean ... you can practically ask your neighbour 'do you want a coffee?' and pass it through the window. I don't like that."
Mother of three Carley was worried about the price and the neighbourhood.
"Probably not only because I can't afford it. Like I don't have a deposit, a big enough deposit saved, and I've lived in Marfell and I probably wouldn't live there with my kids."
Valentino grew up in Marfell but now lived across town, and said the development would be great for the neighbourhood.
"It will make a big difference to the area, but honestly it's been rough for years. They had gangs there and God knows what else there. Whether they're still there I don't know. I haven't heard anything.
"It's a good area. Well I found it a good area and I was there when they did shootings and stabbings and God knows what."
Kiwibuild said a sales process for the homes in Marfell was still to be confirmed.
People wanting a Kiwibuild home must be citizens or permanent residents aged over 18, and buying their first home with an after-tax household income of less than $120,000 for a single buyer or $180,000 for two or more buyers.
They must also commit to living in the property for a minimum period before it could be sold or rented out.
Kiwibuild had about 1500 active subscribers who had registered an interest in homes available in Taranaki, but the spokesperson noted that did not mean all were eligible.
They said across New Zealand there were 841 pre-approved Kiwibuild applications, with 406 Kiwibuild homes so far sold.