Fletcher Residential will buy land from the Government to develop nearly 1000 townhouses in central Christchurch, Prime Minister John Key has announced. The building giant was confirmed as the Government's preferred partner in the $800 million project to develop residential, and some commercial properties, in the east and north frames, on the edge of the central city. The East and North Frame Residential Precinct will provide about 940 new townhouses and apartments to accommodate up to 2200 residents, Key said in a speech to the Christchurch Employers' Chamber of Commerce. The townhouses and apartments would likely be priced between $400,000 and $900,000, Key said, but that would be for Fletchers to determine. Construction would take eight or nine years, Key said. The first homes were expected to be finished within 18 months of the Government signing an agreement with Fletcher, which was expected by November. There would be space in the precinct for small-scale commercial activities to support the residential community . The Government would sell seven hectares of land between Manchester and Madras streets, from the river down to Lichfield St, along with a small block in the north frame. Fletchers would be responsible for designing, building and selling the completed development, subject to minimum requirements agreed with the Government. When finished, the new precinct was expected to increase the inner city population by about 45 per cent. Labour housing spokesman Phil Twyford said the Government had failed to make the new apartments affordable for Christchurch and 40 per cent should be put aside for this purpose. To be affordable, prices needed to drop to $250,000, he said. "The big failure of the residential rebuild in Canterbury is very few houses are actually affordable for people in Christchurch," he said. Earlier this week, data showed the Government was missing its affordable housing targets under the Christchurch Housing Accord. A report on the accord from December set a target that at least 25 per cent of all building consents must be for low cost housing - less than $250,000 in consent value - but that had been achieved in only one month since the accord was signed. In November, 31 per cent of consents issued were for affordable homes, but the rate dropped to between 14 and 21 per cent each month this year. Fletcher Building construction division chief executive Graham Darlow said the company's vision was to help "return the beating heart" to central Christchurch. "We want to protect the precious and familiar while rejuvenating the city with three distinct but linked housing areas that provide diverse living for all." The new housing areas - Avon, Latimer and Lichfield - would reflect their location and local landmarks, he said. Fletcher's chief operating officer of housing, Steve Evans, said the company planned to provide $1 million towards a fund for activities that could draw people back into central Christchurch and put the empty lots to good use before they were developed.