It had been bought by the Rotorua District Council.
Mr Anastasi said the house at which there was a fire at the weekend, number 17, was in such a state of disrepair it was not suitable for such an exercise.
"It's too damaged. We would have to spend money on it to bring it up to a standard for us to burn down."
He said the fire was being treated as suspicious.
Rotorua District Council building services manager Darrell Holder said the council had previously worked with the property owner to make the building secure. The property would be inspected again.
The council cannot issue a demolition order. That can be done only through the courts.