Obstacle for state housing plan

More than 1400 state house tenants want to buy the properties they live in under a new Government scheme but only a few will be able to do so, says Housing Minister Phil Heatley.

Since last November, 1445 tenants had indicated they wanted to buy the Housing New Zealand (HNZ) property they were living in.

Mr Heatley said in June that tenants would have the option of buying their houses at market rates, but they not able to apply until September.

Last Friday, 666 tenants had applied to buy their state houses, and 31 tenants had inquired about buying vacant houses.

Critics of the scheme say it will reduce the number of houses available and worsen waiting lists.

Green Party co-leader Russel Norman said the number of potential sales was concerning.

He said the value of the houses that people had expressed interest in buying was $380 million and it was hard to see how they would be replaced.

"Housing has become unaffordable for many New Zealanders because of the ridiculous housing price bubble overseen by the last Government," Dr Norman said. "The last thing we need is for the current Government to make it worse by flogging off state houses."

The Greens want an increase in the number of state houses, rather than sales.

Mr Heatley said the Government would make sure more houses were available.

HNZ's statement of intent pledged to increase the number of state houses by 1550 over four years.

"So not only are we replacing the state houses that we are selling to tenants, we are building and buying and leasing a whole lot of other ones so what they are saying is absolutely absurd," Mr Heatley said.

"They keep harping on about policies of 20 years ago and they should get into the modern John Key era where we've decided we want to give people opportunities to buy their state home, build a replacement state home and get someone off the waiting list."

Mr Heatley did not think many of those who wanted to buy the houses would be able to do so.

"We'll see a few hundred of those purchase their state home. Ultimately they have to secure a loan from the bank and secondly we have to ensure that the state house that's being purchased is not of strategic use and hasn't got a Treaty covenant over it or any other covenants on selling it."

The Government had told about 3800 tenants - largely those on higher incomes - of the scheme, but some of those who expressed interest were not from that group.

About 40,000 of the 69,000 state houses will be available for sale.

Tenants would have to organise their own finance but the Government extended the maximum amount able to be borrowed under the Welcome Home Loan scheme to $350,000.

Many of the tenants who want to buy the properties have lived in them for about 10 years, and figures to August of those interested in buying showed the value of the houses ranged from $65,806 to $874,000.

- NZPA