The female driver was airlifted to Auckland City Hospital in a status two condition.
Neighbour Lynette Gawn said the mother and daughter had returned home to find the side of the mother's house "wiped right out".
"She is a bit shaken up but she is staying at a friends house for the night. The whole side of the house was wiped right out. She was [upset] at first but then she calmed down and yeah, she has had a bit of a run of bad luck," Gawn said.
"She walks her dog everynight. The car hit the side of the house where the daughter's room is. It wiped out the bathroom, the toilet and the wash house and the impact smashed all the windows on that side of the house."
Gawn, who was one of the first people on the scene, said she had heard the crash and went outside to investigate.
"We heard the impact. My son aided [the driver] and then I went and sat with her and got a blanket to keep her warm until the fire and ambulance arrived." Inspector Chris Tate of the police northern communications centre said the woman's condition had worsened.
"She had been helicoptered back to Auckland and her condition has deteriorated," he said. "I think it is serious causing concern now."
Firefighters and police are still at the scene and and Serious Crash Unit are investigating the incident. The road was down to one lane but traffic was free flowing.