Housing New Zealand 'lost' millions on state houses sales - Labour

An Invercargill state house put up for sale in 2013.
JOHN HAWKINS/FAIRFAX NZ

An Invercargill state house put up for sale in 2013.

Hundreds of state houses were sold substantially below Government Valuation, promoting warnings that local values could be dragged down.

Figures compiled by Labour showed that 443 state houses were sold in 2014, at an average of 13.3 per cent below the Government Valuation.

Labour claims Housing NZ has "lost" at least $13 million on the sales, with the total proceeds from sales where valuations were available raising $71.8m, compared to the $84.9m the houses were valued at.

READ MORE:
* Govt offloads 2800 state houses


"Much of the public debate has been around proposals to sell off large numbers of state houses but already Housing New Zealand are moving large numbers of state houses," Labour housing spokesman Phil Twyford said.

The sales were mainly taking place in regional areas, in favour of Auckland and other growth areas in the North Island, where Housing NZ acknowledges there is a major shortage.

In Gisborne houses were sold at an average of 22 per cent below GV, while sales in Waikato were 30 per cent below GV.

"They appear to be systematically flicking off these houses below their council valuations," Twyford said.

"In some cases I believe that will be putting at risk and depressing the property values of local homeowners."

Housing New Zealand spokeswoman Bryony Hilless  said the organisation "regularly buys and sells properties as part of our ongoing business as usual activity", part of a programme to match its portfolio with demand.

Sales were generally conducted on the open market, although they could be sold at a lower value because where units were being sold for removal, houses were damaged by fire or subsidence, or where sales were conducted as part of a redevelopment.

"Where appropriate, Housing New Zealand's policy is to sell high value properties in order to reinvest proceeds into more housing for those most in need," Hilless said.

Ad Feedback

Five state houses sold in 2014 raised more than $1m, including a $1.36m sale of a property in Devonport, about 5 per cent less than the property's GV.

Almost a quarter of the sales in 2014 were part of special Housing NZ programmes, with 37 houses sold to existing tenants, while another 67 were sold through its FirstHome scheme, where first time buyers were eligible to up to $20,000 - 10 per cent of the purchase price - towards a deposit.

Launched in 2013, the FirstHome programme aims to sell 400 homes to First Time buyers over three years.

Mark Carter, who gained a grant of $19,500 when he and partner Karen bought "a stock standard state house" on Matamata's Rawhiti Avenue, said the scheme was crucial to their quest to find a home for themselves and their two children.

"Without getting that grant, we would never have been able to save the deposit on our own," said Carter.

"We would have had to have borrowed money from family, but it's quite good to be able to do it on our own."

 - Stuff

Ad Feedback
special offers
Ad Feedback