OPINION: Anyone who arrived in Wanaka for the first time could be forgiven for thinking the town is in the middle of a once-in-a-lifetime building boom.

The tiny town centre is increasingly intensified as new, larger buildings replace the original ones.

Not far away, a second supermarket is under construction in a major new commercial and residential development, sustained by the growing number of residents and tourists.

SUPPLIED Billed as both architecturally-designed and affordable, the KiwiBuild homes in Wanaka offered in the first ballot sparked limited interest.

This will provide some relief for a town which becomes so choked over the summer holiday season that supermarket queues are the length of the aisles.

READ MORE: Only seven Wanaka KiwiBuild homes sell from ballot

But the latest boom is not new, it is never ending.

Sitting on the shore of a huge swimmable lake and surrounded by mountains which sustain a significant ski industry, the town of just under 9000 people - outside of the seasonal booms - has tripled in population over 20 years, and is likely to continue to grow for as long as planners allow it to. Locals think it is paradise.

So how could the Government's move to help people shut out of the housing market struggle to find demand in a place where so many people obviously want to live?

While early ballots for KiwiBuild homes were swamped by applicants in Auckland, in Wanaka the deadline had to be extended due to a lack of demand.

In the end, three of the ten houses offered went unsold, a grim start for the Government's plans to sell more than 200 KiwiBuild houses there in the coming years.

Northlake, the home of the new KiwiBuild houses, is on land which only a generation ago seemed to have no better use than rabbit hunting. It is one of several residential developments underway in Wanaka, with more lined up.

Hundreds of houses are being squeezed in and sold for more than $600,000 for a three bedroom home, largely indistinguishable from the KiwiBuild homes.

The problem facing KiwiBuild Wanaka is summed up by promotional material, which to certain eyes, looks like a cruel joke.

An artist's impression of a two-bedroom, 70 square metre KiwiBuild duplex (a house joined to the one next door) home, costing $565,000, has a late-model SUV sitting in the driveway.

Who exactly does Housing Minister Phil Twyford think will buy these houses, that are somehow locked out? These houses look like they were designed for yuppies on ski holidays, not struggling families.

KiwiBuild has faced mocking criticism for allowing individuals with incomes of up to $120,000 or couples with combined incomes of $180,000 to sign up, who have not owned homes before.

That net will capture plenty of people in Auckland and Wellington.

But the issue in Wanaka is that apart from building, there is virtually no industry to speak of other than tourism, with its relatively modest salaries. What holds up the house prices is, in large part, retirement, not high paying jobs.

Salaries of $100,000 are few and far between for those who do not bring their jobs with them when they move there.

"We don't have jobs in IT here. There's hardly any lawyers or accountants," a local businessman said this week. "For someone working in tourism, $600,000 just is not affordable."

It is not as if Wanaka does not have a problem which needs solving.

As well as retired farmers and cashed-up Aucklanders relocating, an apparently significant source of demand for houses is local business owners buying them to rent to their employees at below market prices. Otherwise the staff quickly leave in frustration.

Far from being able to buy a house, many of the workers of Wanaka struggle to rent there, creating something of an underclass, forced to squeeze in wherever they can.

Rebranding a bunch of houses and selling them at a similar price to what is available anyway nearby will not fix the problem.