Auckland super-sizes Housing NZ

NIKO KLOETEN
Last updated 05:00 04/08/2014

Relevant offers

Industries

Demand for builders heats up Heart of the City paid $800,000 in contractor fees Orion Health share fall on lower cash flows Tourism Radio NZ seeks to crowdfund $350K Resort plans for two Auckland islands Prime News redundancies confirmed Picton firm N-Viro supplies parts for floating superstructure Wynyard Group confirms it undershot revenue target Chinese tourists flock to NZ Migration boom tops 50,000 for first time

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 on Friday, 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 up 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.

"I have a view that the respect I had to demonstrate to a passenger because his lie-flat seat didn't go flat on the flight to London is no different to someone living in one of our homes." Fairfax NZ

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content