Housing NZ feels the bite in Auckland

Auckland's prices affect Housing NZ's ability to buy suitable properties. Picture / Brett Phibbs

Housing New Zealand has the same problem as others trying to buy houses in Auckland - high prices - but its systems for buying and leasing properties are sound, the Auditor-General has found.

The office of Auditor-General Kevin Brady has carried out an audit of the effectiveness of Housing New Zealand's buying and leasing programmes.

Its report was tabled in Parliament yesterday.

Housing New Zealand Corporation manages more than 66,000 state houses, worth about $11.3 billion, which are home to about 190,000 people.

Demand for its is services is high - a year ago, 11,458 people were on the waiting list for a state house.

Because of this demand, the corporation in 2001/02 began an intensive programme of acquiring houses by buying, building and leasing properties, particularly in Auckland.

Mr Brady's report said the corporation's programmes were effective and performing well in meeting challenging programme targets.

"However, the programmes face obstacles - most immediately because property values in Auckland have increased steeply, and in the long term because the exact nature of future housing demand is uncertain."

It said the corporation was acquiring suitable properties, but not without difficulty, "largely because of the difficult property market conditions, especially in Auckland".

It was tending to acquire more three-bedroom houses than necessary in Auckland, where it needed more four-bedroom or larger houses.

And high costs were limiting the building of non-apartment properties of one or two bedrooms in the city.

The corporation was aiming to provide 3164 additional state homes throughout New Zealand between this year and the 2008/09 financial year.

Based on population predictions, it estimated it would need 9634 more properties by 2016 to retain state housing at its current 4.24 per cent of the total housing market.

But the report said the forecast to 2016 was uncertain because of the unpredictability of population growth and demographic changes.

The corporation was researching trends among tenants and waiting list applicants.

Overall, the report said, the corporation took a diligent approach to acquisitions and its guidelines were robust.

But its external reporting could be better so that more information was provided to Parliament and other parties with an interest in social housing.

- NZPA