Minister demands review as neighbours complain of vandals frequenting the site.

The country's most expensive state home has sat empty for 18 months while neighbours in the same driveway endure rowdy trespassers - sparking a government-ordered review.

Housing New Zealand has been criticised for sitting on the pricey land while Auckland is in the midst of a housing crisis and 5204 people are on the waitlist for a state home.

The $1.3 million derelict home at 38 Takitimu St in Orakei - a suburb where the average house price is $1.162 million - sits on a 1535sq m section and has sweeping views of the harbour at the end of a long driveway it shares with five other homes, including that of former Prime Minister Robert Muldoon's accountant son Gavin.

He told the Herald he had seen youths hanging around the house since the old tenants were kicked out in September 2012.


The three-bedroom property featured on the front page of the Herald when we revealed Michelle Hawke had cheated Work and Income out of about $88,000 over six years, claiming she was single despite living with her partner.

The corporation has a policy of looking at selling homes worth more than $700,000 when they become vacant - there are currently 801, with all but one in Auckland. But 18 months later, the home is still empty. Housing NZ's acting general manager asset development, Leonie Freeman, said the corporation was in negotiations on a sale with an "interested party" and "sometimes, these negotiations can take longer than might be anticipated".

The property has a council value of $1.3 million but that was set in 2011 when property prices had dipped so it's expected to sell for more. Mr Muldoon hoped to see the property sold soon.

"It seems like a waste of money," he said. "It will probably sell for $1.5 million or more. It would be nice to see a nice house built there but it will more likely be two or three houses. It will sell quickly, I'm sure."

Another neighbour, whose home is worth at least $1.4 million, said she called security guards after a group of about eight youths lit a fire and broke a fence in the backyard about three months ago. A police officer called her to check up, she said. Her family was fed up with noise.

As of last week, 2752 of Housing New Zealand's 68,447 state homes sat vacant across the country.

After the Herald alerted housing minister Nick Smith to the property, he asked for a report into the delay.

"The sale of this house has been too slow and I have expressed my concern to Housing New Zealand. They are reviewing the approach on that particular property and will report back to me on how they can improve the process."


But he said he was encouraged by the improvement in the number of families placed by the corporation - jumping from 6950 in the previous financial year, to 7812 so far this year.

Labour's housing spokesman Phil Twyford said people in his electorate of Te Atatu were living in garages and sleep-outs. "The fact that there are about 2800 vacant state houses in the middle of a housing crisis when there are 5000 families languishing on the waiting list borders on negligent. I think it shows Government mis-management of the state housing stock. These houses are a magnet for vandalism and anti-social behaviour and it's totally unfair on the neighbours, and it's a blight on those communities."

Housing NZ said tenancy managers in the area and contractors doing work on its other houses were monitoring the property.