Bullendale gained consent as an SHA for 88 dwelling units at Arthurs Point last June and in November lodged an expression of interest with the council to extend the development to the west and create another 92 dwellings on about 4ha of land.
The land is owned by Frank Tomasi and family. Mr Tomasi, a leading figure in Australia's National Electrical and Communications Association, has owned the site since 2006.
Bullendale is being developed by Buzz March and Shane Fairmaid.
At yesterday's full council meeting in Queenstown, Mr Fairmaid said to date 26 homes in stages one and two had been sold. The first residents would move in early next year, and stage three was on the market.
The housing affordability issues Bullendale was aiming to help address had even affected those contracted to the homes - and the developers, he said.
Wilsons had been contracted to build the development, but even they were struggling to retain staff, due to the cost of housing in the resort.
Mr Fairmaid said they had been looking at securing pricing and a contract to build stage three, but pricing was ''higher than we wanted''.
They had hoped to sell two-bedroom homes for $549,000.
''It's forecast to go to $620,000 for a two-bedroom home.
''We're disappointed about that but ... the cost of construction at the moment [is] escalating.
''Construction resources are hard to come by. If you want to get more ... you've got to find accommodation.
''It's a bit of a spiral.''
Mr Fairmaid told councillors it was important the wider community, along with the council, continued to fight to improve the accommodation situation.
''We hope that we can help.
''We're certainly prepared to keep moving on it.''
Bullendale Developments had committed to providing 10% of the next development to the Queenstown Lakes Community Housing Trust.
Mr Fairmaid said they hoped to ''strike a deal'' with the trust for the homes to be built by the developer and purchased, completed, by the trust.
While there had been some concerns over aspects of the proposal, including building heights and effects on traffic, council senior planner Anita Vanstone said those issues could be worked through as the project progressed, should it receive approval from the government.
