Millan Arora bought land at Karaka but has had to wait two years to start building his house because there is no water connection. Photo / Brett Phibbs
More than 1000 homes should have been built in a South Auckland development but the land sits bare. Families are facing ruin and having to delay having children because of it, writes Ben Leahy.
Millan Arora and his wife feel like giving up and moving to Australia.
They thought they would be living in their new South Auckland house by now and that their 2-year-old son would've taken his first steps on its carpeted floors.
Instead, there is just a vacant patch of land where their house is supposed to be.
There has been delay after delay in trying to get water connected to the Karaka housing development, 35km south of Auckland's CBD.
And although Arora, 29, hasn't paid a deposit yet, the first-home buyer says the two-year delay getting water has cost him dearly.
His builder has told him construction and material costs have risen so much since he signed up to buy his house-and-land package, he will now have to fork out as much as $300,000 more to build his home.
And if the delays stretch on, and Arora is forced to walk away and buy elsewhere, he will also have to factor in rising land costs.
Similar house and land packages in the area have been going on sale for up to $600,000 more than two years ago, Arora says.
"Who can save $600,000 in two years?"
"My wife is fed up, she's saying: 'Give up the section, let's move to Australia, somewhere where we can actually make a start'."
And they are not alone.
More than 1000 homes are planned for the Karaka development, many supposed to have been built now and filled with families.
Lamp-posts have been erected and roads and footpaths laid out, but the land sits empty.
Four other families told the Herald on Sunday they are feeling as desperate and stressed as Arora.
Each has agreed to either buy land or house-and-land packages in the development off Hayfield Way.
All the families complain that neither the developers - of which there are nine - the real estate agents who sold them the land nor the sub-contractors building the infrastructure are providing them with accurate answers as to what is causing the delays.
Instead, everyone blames each other, Arora says.
Auckland Council, Watercare, and private water supplier Veolia deny any responsibility.
One developer spoken to by the Herald on Sunday claims even she can't fully understand what the problem is, despite putting up most of the money for the water infrastructure.
The delays have prompted Papakura MP Judith Collins to warn buyers to research developers before buying vacant sections from them.
Jonathan Wood, senior property lawyer with Court One, also warns that the process of developing land lacks transparency for buyers.
Buyers typically have few rights before the land title is issued to them.
That means developers have little incentive to share information about the cause of problems or delays in finishing projects, Wood says.
"Excellent schools and a picturesque village lifestyle," the real estate advertisements proclaimed.
Arora, like so many other families, says he was drawn to the housing development because of its schools.
Private school ACG Strathallan with its swish hockey field and rugby pitches is at the end of the road, and the public school is also within walking distance.
Shops and the Manukau Harbour are a short drive away.
A delighted Arora thought this was his family's chance to put down firm roots in New Zealand.
Since arriving from India 12 years ago, he's worked hard to start a new life. Employed in the banking industry and with two children, his hardest challenge has been trying to save enough of a deposit to keep ahead of fast-rising house prices.
"We'd had a plan to build a lovely home by ourselves, a place that our children would know as their home their whole lives."
Downstairs, a master bedroom is planned for his mum, whose knees are giving out.
In December 2019, he gained home loan approval for the $1 million home – made up of $500,000 for the land and $500,000 to build his new house - and signed up to buy.
He was told the water would be connected in three months, and then he could pay his deposit and start building.
Excited, he visited the nearby public school to let them know he is building in the area and his kids would be enrolling when they were old enough.
But it was the school that first warned him there had already been delays connecting water to the development site.
Arora began asking around but no one would give him accurate answers.
Referred by Ray White real estate agent Andy Yang to the developer's lawyers, Arora says he initially received brief email replies, saying the water would be connected soon.
Not long after, the developer's lawyers stopped replying, he said.
Arora was shocked. Don't they have an ethical responsibility to keep buyers informed, he wondered.
However, Michael Hawkins, a director with North Habour Law, which is acting on behalf of the development company AM2011 and its director Wan Lo, said he had been in communication with Arora's lawyers.
"Our client has been using its best efforts to complete the works to enable the water connection to be completed, but has encountered significant technical challenges that need to be resolved. They are still working on this," Hawkins said.
"They are committed to completing the development as soon as they are able to so that their purchasers can settle on the land once the new titles in the development have issued.
Unable to get a fixed timeline, Arora says he's since gone to everyone he can think of – developers, contractors, government agencies - but no one will give him a firm date for when the water will be connected or an answer for the cause of the problems.
His home loan has now expired, and - with his build costs ballooning by an extra $300,000 - he knows the main banks won't approve another one.
"I'm really panicked to try and find an answer for the delays," he says.
"If they give me a correct timeline and plan to fix the water, then I might be able to finance my build by going to a private lender who charges me 12 per cent interest.
"The normal banks won't do a loan for this extra cost."
Kiran, who didn't wish to give his last name, is in the same boat.
He signed up for a house-and-land package in 2020 but has been unable to proceed until the water is connected. It's forced his family to put their life plans on hold.
"If we could have moved into a house by now, we could have decided to have another child, but unfortunately it's been distressing that we can't know how this is going to end."
Jing Zhang has also had to delay trying for her first child after buying nearby.
She still has home loan approval, but fears that if she got pregnant it would affect her family's income and lead her bank to cancel her loan.
Unlike most others, who only have vacant land, Zhang's house is already built and ready to live in.
Builder Generation Homes built the house as a showroom before it was sold in 2020 to Zhang, who was told the water connection would be ready shortly after.
Yet nearly two years later, she still can't take ownership of the home because the water hasn't been finished.
Meanwhile, Generation Homes, who have previously said they were also victims of the hold-up, continues to bring prospective buyers into the house, showing it off as an example of homes that can be bought in the nearby Park Green development.
Another family say they decided to push ahead late last year, buy their land and start building an eight-bedroom home on their section, even though the water isn't connected.
They saw fresh construction activity in the development and believed the new water pipes were finally being laid and the connection finished.
Their home's concrete foundations went down days ago, but now they've seen work on the water infrastructure halted again.
The family fear they gambled wrong and could be left with a finished $1.7m home they can't live in or sell.
Gurpaal Toor is another waiting for his land to be ready. He also says the major challenge has been the lack of information from developers.
Being private companies, they are under no obligation to inform buyers about the cause of the hold-ups, he says.
This is despite up to 1000 families being affected and the issue being in the public interest, he says.
The Hayfield development area has been beset by troubles from early on.
Auckland Council Papakura Local Board chairman Brent Catchpole says the city's water infrastructure was not designed to pump enough water to the many new developments in the area.
Then, the up-to-nine developers preparing vacant land in the Hayfield area allegedly squabbled about the costs of paying for infrastructure within the development.
When they couldn't agree, the company set up to design and collect money from each of them to pay for the infrastructure went into liquidation in 2019.
Eventually, two of the developers – those preparing the land where Arora and Zhang bought - decided to pay for the entire development's water infrastructure.
Yet despite now having the money to press ahead, technical issues have halted the works again.
CB Civil had been contracted to build the most recent water infrastructure but recently told the Herald on Sunday they were "stood down due to design issues".
It is understood civil engineers Candor3 are responsible for the design work.
However, Candor3 has not responded to any messages from the Herald on Sunday. Homebuyers spoken to by the paper say they also have had no responses.
Liquidator McDonald Vague, which took charge of the funds for the infrastructure build, also did not comment.
Francis Xu, from Golden Harbor Development, one of the two developers who stepped up to pay for the water infrastructure, says there had been many unexpected delays.
One of the most recent was finding the right place underground to put in a second back-up water pipe.
Xu claims she had no idea why this had been so difficult.
"I don't know if there is anyone who knows the truth," she says.
Arora is not convinced. The Herald on Sunday understands there is not enough room for the second back-up water pipe in the underground infrastructure networks laid by the developers' contractors.
And although Xu says the delays are affecting her as well and she is doing her best to complete the project, Arora worries developers hope to delay long enough to get existing buyers to walk away in frustration.
Then the land might be able to be resold at a much higher price, Arora says.
MP Collins hopes for a speedy resolution to the delays, saying Auckland needs more houses.
She also warns all buyers that in general, it is important to find out as much information as possible about developers and their sub-contractors before buying from them.
Developers don't have to pass any tests or gain any special qualification, she says.
"So you need to pick your developers very carefully."
Court One's property expert Wood says most large-scale developers, such as Fletcher Building, have a brand name to protect and so often actively supervised the work their subcontractors did.
But that was not the case with many smaller developers, who were often largely anonymous.
He says developers typically set up a special-purpose entity or company in a new name for each new project they start.
That legitimately helps reduce the financial risk to the developer, he says.
But it also means it can be hard to find out who the developers are and trace their work across different sites to find out whether they had failed to deliver on past promises or had projects collapse altogether.
The idea that "developers who don't act properly will get a bad name is fanciful, frankly", Wood says, "because there are so many and they don't necessarily last for long".
He also says that developers often have elaborate contracts with their sub-contractors, but end buyers who have not yet had the land titles transferred into their names typically have few protections.
That means developers have little incentive to keep buyers informed about problems or delays with their projects.
"It is structurally set up in a way where you [as a developer] are best to keep quiet.
"If I was sitting there advising [a developer], I'd say there is no obligation on you to give any information to people and I'd suggest you don't."
For buyers like Arora, whose lives are being turned upside down, that is cold comfort.
He believes the Government has a role to play to help protect buyers.
But having now failed to get help from government agencies and lawyers, the only place he has left to go is directly to his developer for answers.
The trouble is that no one will give him a phone number for the developer, who Arora is told lives in Singapore or China.
"Where am I supposed to go to get answers – China?" he asks.
"It just seems like there is no accountability."
Hawke's Bay hosts Christmas lunches for those seeking company and support.