Outcry over state house sale

Food bank co-ordinator Linda Taumoeanga does not believe state houses should be sold.

The new government initiative to sell vacant state homes to struggling first-home buyers is being slammed in Wanganui, amid "a desperate need" for decent social housing.

On Tuesday - the day the Reserve Bank introduced restrictions making it harder for some to purchase a home - Housing Minister Nick Smith revealed that 400 unwanted state houses would be sold off in provincial centres and buyers would be gifted up to $20,000 for a deposit.

Housing New Zealand (HNZ) data shows that, as of June this year, eight people in Wanganui were on state home waiting lists. Of the 2724 HNZ-managed properties in Wanganui, Manawatu and Levin, 107 were vacant in June.

There were 3811 people waiting for housing nationwide, with 357 classified as homeless.

Under the new FirstHome policy, the Government will sell 46 state houses in Wanganui, Levin and the Manawatu.

But Wanganui City Mission food bank co-ordinator Linda Taumoeanga said there was "a desperate need" for state housing in Wanganui, and many of the existing homes stood empty because of their poor condition.

"We have undesirable places to go - but we haven't actually got somewhere that I would call safe and clean. If I needed a place to go urgently, I wouldn't want to go to any of the places we've got."

State houses should be there for people who need them and not for sale, Mrs Taumoeanga said.

The City Mission had been working on an emergency housing project, which had to be abandoned due to lack of funding.

"The government sale of the state houses is not doing anyone any favours ... families or single people."

Next week, the first 41 HNZ properties will be offered to qualifying first-time buyers nationwide.

To be eligible, a buyer would have to earn $53,000 or less and commit to living in the house for at least three years. A couple would have to earn no more than $80,600.

HNZ would make a grant of 10 per cent of the property's value, up to a maximum of $20,000.

The houses were all over the country, with the largest number in Northland, Waikato and central North Island.

New lending restrictions came into force this week, which mean most people now need a deposit of at least 20 per cent to get mortgage approval.

Dr Smith argued the FirstHome initiative would not only help modest income earners get on the property ladder, it would free up capital to invest in social housing in high-demand areas.

However, critics have argued the scheme is a poor use of taxpayers' money and focused on the wrong areas.

Green Party co-leader Metiria Turei said the Government was selling houses that it could not spare.

"Every region of New Zealand has families on the waiting list for a state house.

"Those families should be the priority for vacant state houses like the ones Dr Smith plans to sell."

The policy would cost up to $6 million to help 500 people, she said.

"That's a poor use of public money."

Additional reporting by Isaac Davison