$19 million buys more state homes to meet need

Hon Phil Heatley
Minister of Housing

4 February 2011
Media Statement

$19 million buys more state homes to meet need

Housing New Zealand Corporation (HNZC) is making significant progress in its efforts to reconfigure the state housing network with the sale of high value properties funding the delivery of more state homes.

Housing Minister Phil Heatley says the sale of individual ‘high value’ state properties worth more than $700,000 demonstrates how HNZC is utilising its assets more effectively to increase the provision of homes for tenants in need, without additional cost to the taxpayer.

Since July 2008, the Corporation has sold 24 old, but high value state properties, earning more than $19 million.

The $19 million earned from the sales is being reinvested in other state housing. Based on an average cost of $425,000 for a four-bedroom home and section in Mangere, the proceeds could pay for around 45 new homes.

"I want all state homes to be of a good standard, be the right size and in the right location, to meet demand from people in the greatest need of housing help," says Mr Heatley.

"In addition to adding to the state house portfolio, these sales also allow the Corporation to provide houses designed and built more in keeping with the needs of today’s households, rather than the needs of 60 years ago.

"I am delighted to see that Housing New Zealand is making good progress with regard to housing the greatest number of people possible by utilising its property portfolio more effectively," Mr Heatley said.

"The Corporation has 186 properties valued at over $700,000 in its portfolio. Often these are old homes built on large sections in areas that were once cheap, but have now become expensive and desirable. Most of the value is in the land.

"Some of these 186 properties will be retained because they house community organisations or they can be effectively redeveloped with more state homes making better use of land," says Mr Heatley.

The sale of high value properties is just one part of a much larger reconfiguration programme that Housing New Zealand plans to undertake. Old state homes in areas where there is no longer demand will be sold, and the proceeds reinvested in areas where they are needed most.

"The Ernie Pinches site in Mount Roskill is a great example of how HNZC is redeveloping and maximising the benefits of its existing resource. Here 36 old state homes are being replaced with 68 new units," said Mr Heatley.

"Nearly twice as many new homes, designed to modern standards are being built in an area of high demand," says Mr Heatley. "This is an example of pragmatic, commonsense asset management the National Government wants to encourage.

"Demand for social housing is forecast to grow significantly in future. We need to start getting more out of the resources we have today so we are better prepared for the challenges of tomorrow.

"The Prime Minister has signalled the need for restraint in public spending. HNZC have demonstrated how good management can allow it to grow its property portfolio through more efficient use of it existing resource and that is to be applauded," said Mr Heatley.

ENDS