Plans to build an apartment complex at the former supermarket site in Kopeopeo are back on - this time with Kāinga Ora taking charge of the development.

Kāinga Ora homes and communities Bay of Plenty director Darren Toy told Local Democracy Reporting the Government housing agency had recently bought the almost 6000-square-metre site at 114 King Street in Whakatāne and also a 2032-square metre site in Ōpōtiki.

"To help meet the high demand for homes for whanau in the Eastern Bay, Kāinga Ora has recently purchased [the sites] to build new warm, dry homes," Darren says.

The Whakatāne site, which has formerly been home to Woolworths, Price Chopper and Countdown supermarkets, was owned by Allan Unsworth who said he thought the development was exciting for the community.

"It will really help beautify this area which has become quite run down and also provide much needed housing and work for our tradies."

He says he has had many offers to buy the site in the past eight to 10 years he has owned it, but no one has been prepared to offer him the right price.

Tauranga-based development company Quintex Properties had plans drawn up and resource consent for 42 three-bedroom residential units to be built on the site last year, marketed as 42 on King, however, the company pulled out of the project due to rising building costs making it unviable.

Allan says Kāinga Ora will be going ahead with the 42 on King apartments.

"They're going to tweak [the plans] a little bit, but that's pretty much how they do them anyway. They're going to start next year."

Allan says he's recently been considering building a commercial shopping centre on the site.

'I had a couple of tenants keen to move in, but then these guys came along and gave me an offer I couldn't refuse.

"I thought, do I spend the next three years dealing with council and the issues of trying to get building materials from overseas.

Allan is not prepared to reveal how much Kāinga Ora has paid for the site but according to real estate website OneRoof the property recently sold for $2.5 million.

He says the sale went through on November 22.

Darren says Kainga Ora are currently reviewing the existing plans for the site to assess other potential options for this 'large and well-located site near services and schools”.

"In Opotiki we have also recently purchased 155 Ford Street, a large site which we'll redevelop to provide six new two-and-three bedroom homes, replacing the existing older home."

According to website homes.co.nz the Ford Street property sold on September 23 for $400,000.

"I'm excited we've been able to secure both of these sites for much needed homes for whanau and tamariki, and we're working as quickly as we can to provide these new homes. We're in the early stages of these housing developments, and once we have more details we'll share them with the community."

Darren says rumours that Kāinga Ora has also purchased the Nau Mai Motel, which is currently used by the Ministry of Social Development for emergency housing, are untrue.

"I can confirm Kāinga Ora hasn't purchased or is looking to purchase the Nau Mai Motel in Whakatane."

Whakatane Mayor Judy Turner says it's fantastic news.

'With our housing shortage, we know that it's across the whole housing sector from high-end housing to affordable housing and rentals at the other end.

"The easy bit, to my mind, is the medium to high-end. You re-zone some land and a developer comes along and develops it and it's all go. But my biggest concern is how we are going to supply the affordable end of the market, particularly with the rentals.

"So I hear about projects like this and it just delights me, because that's exactly the kind of thing we need."