Government to sell Tauranga state houses to one buyer

The Government says it intends to sell a majority of Tauranga's state houses to a single buyer or consortium. Photo / File

The Government says it intends to sell a majority of Tauranga's state houses to a single buyer or consortium.

Information memorandums issued today for the sale of up to 1140 state houses in Tauranga and 370 in Invercargill also reveal that the Government will take second mortgages over all the properties to ensure that it shares in the proceeds if any are sold out of social housing on the open market.

The documents indicate that the Government is looking for a single buyer for all of the 1250 state houses in Tauranga and Te Puke, apart from 115 properties for which the Ngati Ranginui iwi has right of first refusal.

In Invercargill, the memorandum says the Government "intend to package the properties into one to three transactions".

The different plans for the two cities appear to reflect differing market demand for the houses. At least two groups - an iwi group and IHC-owned Accessible Properties - are known to be keen to buy all the houses in Tauranga, but no bidder is known to be interested in all the houses in Invercargill.

A spokesperson for the Tauranga Moana-Te Puke Housing Consortium, Victoria Kingi, confirmed that her group was interested in buying all the houses in Tauranga and Te Puke for joint ownership by the three local iwi Ngati Ranginui, Nga Potiki a Tamapahore and Tapuika.

"We are looking seriously at local solutions for local housing need, which is why our iwi bid has focused on the local iwi because we are already providing social services and housing services," she said.

She said that if it was the successful bidder the consortium would take tenants referred to it by the Social Development Ministry from the social housing waiting list.

"We have to take the tenants we're given. It's not our intention to start putting our own people in those tenancies," she said.

"It's also important that we see better outcomes. What's the point if the tenants are not any better off?"

She said the consortium had talked with the Tauranga Community Housing Trust, but it had decided not to join the consortium.

The consortium had also invited Accessible Properties to have discussions, but the IHC-owned company had not responded and appeared to be the main competing bidder at this stage.

Asked whether the two parties might submit a joint bid, Ms Kingi said: "I think we'd be open to having that conversation. We've made a couple of overtures now."

Accessible Properties chief executive Andrew Wilson confirmed that his company was still keen to buy all the available Tauranga houses and declined to comment on whether he had talked with the iwi consortium.

Ms Kingi said there was also known to be interest from "international bidders" and "commercial companies that are interested in the profit side of things". The Government has said that it will sell only to a consortium that includes a registered community housing provider. Queensland's Horizon Housing, which has expressed interest, is not yet on the NZ register.

The memorandums reveal that houses will be sold with an encumbrance requiring they be used only for social housing unless the Government later agrees to remove the encumbrance.

The documents accept that properties "may be sold below their book value because their sale price will reflect their use for social housing purposes". The book values at June this year are stated as $321.2 million for the Tauranga and Te Puke properties and $40 million for the Invercargill properties.

All properties will carry a second mortgage to the Government valued at the difference between book value and their actual sale price, called the Government's "Initial Capital Investment".

If the encumbrance is removed and a property is later sold on the open market, the Government "will share the capital proceeds with the provider, reflecting its Initial Capital Investment at the point of transfer".

However if a property is sold as part of a plan to rebuild more social housing, the documents say the Government "may be willing to recycle all of its Initial Capital Investment into the provision of new social housing supply on terms to be agreed at the time".