Three adjoining state homes on Amy St in Ellerslie with council valuations each above $2m are part of an estimated half-a-billion dollar sell-off of Kāinga Ora in the coming financial year.
Three adjoining state homes on Amy St in Ellerslie with council valuations each above $2m are part of an estimated half-a-billion dollar sell-off of Kāinga Ora in the coming financial year.
Priority sales will include hundreds of homes in Auckland’s most desirable suburbs, with all funds reinvested to build replacement homes in affordable areas, Kāinga Ora says.
Critics warn against selling off homes in wealthy suburbs, while insiders expect high interest from developers due to the prime locations.
The sell-off of hundreds of state homes in Auckland’s most desirable suburbs is being eyed as a likely “goldmine” for excited developers, insiders say.
Up to 900 state homes nationwide are expected to go on sale each year under new Government plans, with Kāinga Ora estimating itcould earn as much as $500 million from sales in the coming financial year alone.
Priority will be given to selling those in the most sought-after locations, including 200 homes valued at around $2 million each or $400m collectively, Housing Minister Chris Bishop has said.
Already the first Auckland properties have hit the market, including three Ellerslie cottages on adjoining blocks of land that each have $2m-plus council valuations, and a Point Chevalier home reportedly sold to a developer for $1.37m.
Developer and Ray White Manukau co-owner Tom Rawson expects hot competition for the homes because their desirable locations typically offer lower risk and higher returns.
“I’d call it a goldmine because they’re in proven suburbs, generally in prime positions – it’s not like greenfields subdivisions on the outskirts,” he said.
He believed the sell-off could mark one of Auckland’s most significant releases of prime land in years.
Three humble cottages on Amy St in Ellerslie put on sale by the Government are expected to fetch top dollar.
Kāinga Ora is currently sitting on a treasure trove of land with strong development potential in suburbs such as Ōrākei, Ellerslie, Ponsonby, Westmere, Sandringham, Mt Eden and Point Chevalier.
It says all money made from the sales will be reinvested into homes in more affordable areas.
“Kāinga Ora is not reducing the number of homes it owns. For each existing Kāinga Ora home sold, a newly built home is delivered elsewhere,” Gareth Stiven from the agency’s Finance and Policy division, said.
Critics of the sell-off say better communities are created when social housing is mixed right across the city.
They also question the current Government’s right to make a cash grab on valuable land, which previous administrations preserved and allowed to grow in value over 50-80 years, without putting the money to work in an innovative or pioneering manner.
Andrew Crosby, a former boss of builder Universal Homes and senior manager at Kāinga Ora when it was called Housing New Zealand, can see both arguments.
Three adjoining state homes on Amy St in Ellerslie with council valuations each above $2m are part of an estimated $500 million sell-off of Kāinga Ora properties in the coming financial year.
“You don’t want to create the ghettoisation of Auckland by concentrating social housing in a few spots,” Crosby said.
Yet building new state homes on such expensive land didn’t maximise the property’s value, he said.
Keeping a $2m site for one family’s use was inefficient and wasteful when the $2m could instead pay for homes for three to four families elsewhere, he said.
State home sales: Developers to ‘lap it up’
Regardless of whether the sales are merited or not, developers are likely to pounce, Crosby, who now works as a consultant with Xpect Property, said.
“Every developer who’s in the mid-to-upper end of the market will be keenly interested in the sites that the Government have identified,” he said.
“It’s land they might have driven past 10 times in the last year where they haven’t put a note in the letterbox saying, ‘Will you sell me your site’, because it’s government land.”
“And now all of a sudden it’s on the market.”
Rawson agreed: “I wouldn’t be the only one that’s driven past 1000 square metres [of land with a single state home on it] in one of these suburbs and gone, ‘Man, that’s gotta be worth a couple of million bucks now’,” he said.
This Point Chevalier Kāinga Ora home on Walmer Rd with its 591sq m section reportedly sold for $1.37m.
While building activity had dropped significantly and house prices were currently flat, the timing of the land release was good, he believed.
A lot of developers were looking for their next opportunities after spending recent months waiting on the sidelines or finishing projects started during the last building boom, Rawson said.
And the lower-risk nature of many state home sites would likely be enough to tempt most back into the market.
That’s because many of the properties were in proven suburbs where other townhouse and terrace projects had already been completed, giving developers “lots of comparable stats” to base estimated cost and profits on, Rawson said.
The collection of state homes at 43, 45, and 47 Amy St in Ellerslie is expected to sell together in one sale to a developer.
And despite the sites being most likely suited to luxury or mid-range developers, he expected builders of all backgrounds to step up to bid.
No ‘fire sale’: Housing Minster
Bishop, the Housing Minister, earlier said the sell-off wouldn’t be a “fire sale” and would be managed in an orderly way.
Kāinga Ora said it planned to sell 900 state homes from July 2025 to June 2026, earning an estimated $400m-$500m.
Of those, about 300 would be in Auckland.
“Decisions to sell specific sites will be ongoing and at any one time there will be properties at various stages of the process,” Stiven said.
“Many of the properties offered for sale will be older houses that no longer meet the changing needs of our tenants or require significant upgrades. Others may be homes in high-value areas.”
Some of those sold would also be properties built within the last 10 years which were not the right type of housing in the right location, the agency has said.
Industry insiders say homes such as those on Amy St in Ellerslie are likely to draw keen interest from developers.
Stivensaid selling homes wasn’t new for Kāinga Ora and was also done under the last Government.
“Just like any other property owner or developer, we continually assess our housing stock and sell where we need to,” he said.
The agency used independent valuations to help inform which properties to sell and for what prices, he said.
Crosby said that while he believed there was demand from developers, he would have waited “until the market improves to get top dollar” for the high value locations.
On the flipside, he also believed the Government wanted to show it was cutting costs.
“Politically, they want to show that they’re selling stuff.”
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