Auckland's expensive housing has boosted Housing New Zealand's balance sheet, but the city poses unique challenges for the state housing agency.
Speaking at a Trans-Tasman Business Circle event in Auckland today, Housing New Zealand chief executive Glen Sowry said his organisation dwarfed some of New Zealand's biggest companies.
He credited Auckland's booming housing market for pushing the state-housing agency's portfolio of 68,000 houses nationwide to a combined value of $18.6 billion.
By comparison, the three state-owned power companies recently listed on the stock exchange were worth just under $17b put together, he said.
"We are the Government's second-biggest asset after the roads," Sowry said.
"Our balance sheet is bigger than Genesis, Meridian and Mighty River Power combined."
About 45 per cent of Housing New Zealand's tenancies were in Auckland, where it accounted for a "staggering" 7 per cent of the city's housing stock, Sowry said.
However, many of the houses were the wrong size or in the wrong place.
The "archetypal" three-bedroom state house was an iconic image in Auckland but these houses were reminders of a bygone era, he said.
"Nationwide, our most common household composition is now one parent with one or more children," Sowry said.
"This is closely followed by a single, elderly tenant. Indeed over half of all applicants waiting for social housing want smaller one or two-bedroom, low-maintenance properties," he said.
"Conversely in Auckland, we've also got large families with many children, who need four, five, even six-bedroom homes to avoid overcrowding.
"None of these modern situations are exactly a great match for the traditional state house on a quarter acre [1000 square metres] section."
Sowry also highlighted the age of Housing New Zealand's stock, saying its houses were 43 years old on average and maintenance costs were high.
Asked about the difference between his current job and his previous role as a senior executive at Air New Zealand, Sowry said there were many similarities.
"You're running a significant asset base and utilisation is incredibly important. You also have a very large customer base," he said.