6 August 2006

HNZC to explore future of high value properties

The Government has asked Housing New Zealand to actively explore whether it should retain high value properties as they become vacant, Housing Minister Chris Carter said today.

"In recent years some properties owned by Housing New Zealand have increased significantly in value as a result of the rising and changing property market," Mr Carter said.

"Housing New Zealand now administers 104 properties with a capital valuation exceeding $700,000. Many of these houses were built when the suburbs they are located in were not as desirable as they are today. The value of them lies almost entirely in the land they sit on.

"Given the shift in property values in recent years, the Government has asked Housing New Zealand to act as a prudent landlord and actively explore whether it should retain its high value properties," Mr Carter said.

"I have inserted into Housing New Zealand's 2006/07 Output Agreement a requirement to report back to me on potential mechanisms for improving the utilisation of housing stock, and included in this work is an examination of high value properties.

At present, when selected high value properties become vacant Housing New Zealand considers three options:

- Selling the property and reinvesting the proceeds in new state houses;
- Redeveloping the property to accommodate more state homes;
- Retaining the property and reletting it.

"The Government is committed to retaining land in areas where there is demand for housing, and upholding the tenancy rights of the families living in state houses. We are not interested in reducing the number of state houses like National did in the 1990s," Mr Carter said.

"However, we must make the best use of the resources we have. This review is designed to achieve that. Income from high value properties will be reinvested in social housing," Mr Carter said.

Notes:

- 93 per cent of HNZC properties are valued under $300,000
- HNZC has 104 properties with a capital value exceeding $700,000.
- There is one state house property valued at $2m, some $1.9m of which is the land value of the property. The house itself is worth $100,000.

ENDS

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