About 1700 government employees will move into central Christchurch in 2016 as part of the city's earthquake recovery, Prime Minister John Key says.



In a speech to the Canterbury Employers' Chamber of Commerce today, Key said 20 public sector departments and agencies would relocate to central Christchurch during 2016.



It was planned that they would move into four new buildings around the city's proposed retail precinct, occupying about 24,000 square metres of office space.



Key said negotiations over leases were continuing, but the move would put 1700 government employees in the central city.



"This will help support the recovery of the central business district and offer a long-term solution for government office accommodation in the city," he said.



"It will be a catalyst for more economic activity in the CBD, whether it is retail or associated businesses."



Departments to relocate include the Ministry of Social Development, NZ Transport Agency, ACC, Department of Conservation, Statistics New Zealand, Ministry of Education, Ministry of Business, Innovation and Employment, Ministry of Health, Housing New Zealand Corporation and Department of Internal Affairs, along with some smaller agencies.



Key said the agencies would be clustered so they worked better together, and the buildings would be constructed to at least 100 per cent of the building code.



The move would mean an extra cost of about $90 million over 20 years, including the cost of leaving temporary accommodation before leases ran out.



"However, I will be expecting ministers and their departments to improve on that figure as we seek to get the best value for taxpayer money," Key said.



The government workers would join more than 1000 workers from big banks set to return to the central city as their employers negotiated space with developers.



Key thanked retiring Christchurch Mayor Bob Parker for his contribution to the emergency response immediately after Canterbury's earthquakes and the rebuild efforts.



"Bob's leadership at a time of great uncertainty will not be forgotten."



He said the relationship between central and local government was close, and he looked forward to working with the new mayor and council after next month's local body elections.



He spoke of the "tenacity" of Cantabrians and their "continuing patience" as the rebuild ramped up.



"I also want say at the outset that the disaster and its aftermath have resulted in quite natural and understandable frustration and unhappiness from some people," Key said.



"That is to be expected, given the scale of the dislocation and destruction, and the complexity of the recovery and rebuild."



The Government had made some difficult decisions and "at times tradeoffs have had to be made".



"In a rebuild of such scale and complexity, there won't always be perfect outcomes, but I can tell you that we are fully committed to the rebuild, and good progress is being made," Key said.



The estimated cost of rebuilding Christchurch was increased from $30 billion to $40b in the May Budget, with the Government committed to contributing about $15b.



"We are not only rebuilding a central business district that has been almost completely destroyed or demolished, but we are in the process of rebuilding and repairing tens of thousands of houses, and repairing and replacing hundreds of kilometres of roads and water and wastewater pipes," Key said.



"There can be no doubt that we are in the middle of the largest economic undertaking in New Zealand's history."



He said the regional economy was "steaming ahead", with improved growth and employment rates, building consents and strong retail trade.



Canterbury Earthquake Recovery Authority (Cera) figures showed 456 residential dwelling consents were issued for Christchurch in July, up from 337 in June.



The June total was a 43 per cent increase on the same month a year ago, and the July figure was a 40 per cent increase.



The central-city rebuild was also making progress, with more people involved in building than demolishing for several months.



Cera had reached agreements for the purchase of 164 properties by August 30 - about half of the total land needed under the rebuild blueprint.



Key said more news on anchor projects would be released in coming weeks.