Papakura ‘low-cost’ housing site has more than doubled in value — first 50 houses will be sold at market prices.

A big state-owned site in Auckland once earmarked for social and affordable housing is being carved up for sale - and the first 50 houses will be sold privately at market rates.

The 24ha site formerly part of the Papakura army camp, between Walters Rd and McLennan Park, was bought by Housing NZ in June 2004 for $10.7 million. Its rating valuation has more than doubled to $23.4 million because of Auckland's desperate housing shortage, but no houses have yet been built.

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In October 2012, the agency unveiled plans to build 450 to 500 homes, including 10 per cent state houses, 20 per cent other social housing and 70 per cent for private sale at prices likely to be "in the high 200s to the high 300s" - which would have made it Auckland's biggest low-cost housing development for 25 years.

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Instead, real estate agent Barfoot & Thompson yesterday advertised seven "super lots" of up to 16 sites each for sale by expressions of interest, with pre-designed two-, three- and four-bedroom houses designed by Studio of Pacific Architecture.

Housing NZ general manager of asset development Leonie Freeman said the release of 50 sites on 2ha would all be for private sale at prices that "will reflect the current market at the time of sale".

Community Housing Aotearoa, whose Auckland members met yesterday, said none of its members appeared to have been consulted about any remaining plans for social housing in the development.

"It was both a surprise and a disappointment that nobody had been contacted or was aware that this was happening now," said the group's director Scott Figenshow.

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Labour housing spokesman Phil Twyford said it was "extremely disappointing" the Government had not built any houses on the land in 11 years.

"Inexplicably, they seem to have dialled back their ambition to include significant numbers of affordable and state or social housing in the development," he said.

However, Ms Freeman said the initial sales were only the first stage of a plan that would now see up to 600 homes on the full 24ha site "over a period of at least five years".

"The number of private, Housing NZ and affordable properties that will populate the site are still to be finalised," she said. Mike Greer Homes was already building 11 three- and four-bedroom private homes for completion mid-year.

Beyond that, Housing NZ was "working through the options for incorporating affordable housing on the site under an 'OwnHome' brand".

"The approach is still being worked on but there is the possibility of linking the prices of these houses, and the eligibility of potential buyers to purchase them, to the criteria for the Government's HomeStart programme," she said.

KiwiSaver HomeStart grants of up to $10,000 per couple for an existing home and $20,000 for a new home became available last week for first-home buyers with incomes below $80,000 for singles or a combined $120,000 for couples buying homes for up to $550,000 in Auckland, with lower limits elsewhere.

This is the first time Housing NZ has suggested an "OwnHome" brand for new housing linked to the HomeStart criteria. A spokesman said the agency would "look at ways of partnering with industry" to develop such housing.

See more: www.mclennan.co.nz