Margaret Mahy's old Governors Bay home will go back on the market after a community group's bid to purchase it for locals and aspiring writers was unsuccessful.
Mahy died in 2012 and had lived in the three-bedroom house near Christchurch since 1968, where she raised her two daughters.
A trust was formed by local resident and former Christchurch Writers Festival director Morrin Rout to turn it into a community space.
Bridget Mahy told the Herald after much research and effort, the trust fundraising committee struggled to raise enough funds to buy the house, so it will go back on the market before the end of the year.
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The cottage had a rating valuation of $640,000 and was on the market with a deadline sale of June 11.
Daughter Penny Mahy told the Herald the house still boasts a number of in-built bookshelves.
"It's probably a little bit excessive for most families these days but when we grew up in the house basically every wall was covered in books."
Margaret Mahy owned hundreds of books, which were stacked along 170 lineal metres of bookshelving, most of which now belong to Penny and Bridget.
"She had an amazing collection. She bought everything she could find by other New Zealand authors as well."