Developer left holding unwanted properties

A South Auckland developer says no one will buy his new three-bedroom places for $305,000.

Mark Hackshaw of NAD Trust has been trying to sell 135sq m brick-and-tile houses with appliances, fencing, blinds and double garages on freehold land in Tuakau. He has been aiming at people eligible for the state shared equity scheme, which has proved unpopular. Only $1.6 million of its $18.4 million budget has been paid out.

That scheme grants home loans to households earning up to $85,000 in high-cost locations such as Auckland and Queenstown. Mr Hackshaw said he built and sold only six duplexes with shared driveways on sections of 250sq m to 400sq m. He is left with dozens of South Auckland sections which he says he cannot now build on.

Only one person was able to use the state shared equity scheme to buy a house he developed, he said.

Housing New Zealand's annual report out this week revealed that the Labour Government's sop to housing affordability was a dud, leaving economist Brendan O'Donovan floored and saying free money was usually snapped up. The scheme does not demand immediate repayments and was designed to be a handout or top-up loan allowing people in expensive areas to climb onto the housing ladder. The scheme is due to finish next winter.

Some Herald readers yesterday claimed Auckland had no good houses available for the maximum $305,000 loan criterion. If such houses existed, they were in crime-ridden areas too far from the city centre, one reader said.

Mr Hackshaw has more than 40 South Auckland sites but says it is uneconomic to develop them and he has no faith in the state scheme.

People were not prepared to live in Tuakau and preferred areas like Sandringham or Mt Eden, yet they could really only afford about $300,000, he said. Nor could people who looked at his houses save the $15,500 deposits.

Many could not afford the repayments either, Mr Hackshaw said.

Yet for many people the duplexes were cheaper than renting. Using the maximum shared equity state grant of $91,500 for Auckland, borrowing $200,000 from the sole lender involved in the scheme, Kiwibank, and contributing $15,500 deposit left people repaying only a little over $200 a week, Mr Hackshaw said. Most three-bedroom double-garage new Auckland houses cost more to rent.

Last September, Mr Hackshaw marketed his duplexes with Harcourts Pukekohe and received 13 offers. But only one was successful. The others did not meet the lending criteria because their credit backgrounds or work history record were marred in many cases.

Aucklanders wanting to contact Mr Hackshaw can email ppt@xtra.co.nz