Deep price cut signals more redevelopment deals ahead
Kāinga Ora is poised to take a major financial hit on an Auckland development site it bought eight years ago, with the agency now selling the Upper Queen St section for less than a third of its original purchase price, Stuff reported.
The empty 275-square-metre site at 70 Upper Queen St was intended for a 10-storey social housing development, but COVID-19 delays and rising construction costs forced the project to be abandoned.
Kāinga Ora purchased the land in 2017 for nearly $3 million, but it is now being sold as part of a nationwide divestment of government housing assets.
Asking price slashed after months on the market
The mixed-use zoned site was originally listed in July for $940,000 but failed to sell. It has since been reduced to $898,000, despite an RV of $1.45 million, leaving Kāinga Ora facing an estimated $2 million loss.
The listing is being marketed as a “rare and affordable” opportunity in one of Auckland’s most “well-connected CBD fringe locations”.
‘Best strategic decision’ despite steep write-down
In a statement to Stuff, Nick Howcroft, acting general manager of urban development and delivery at Kāinga Ora, said the decision to sell was made to unlock private-sector development.
Howcroft said the agency was selling the property to “create an opportunity for the market to develop much-needed housing” in central Auckland.
He added that the current asking price reflected the “most recent independent market valuation”, completed before the listing.
Despite the large discount, Kāinga Ora maintains the sale aligns with broader redevelopment goals.
“Since acquiring this site, we have delivered 200 social homes at our nearby Te Mātāwai complex and secured additional housing in the area," Howcroft said. "We now also have other sites in the area where we can deliver further social homes more cost-effectively.”
Government sell-down continues amid scrutiny
Housing Minister Chris Bishop declined to comment on the individual sale, with his office noting such decisions are “operational matters” for the agency.
Earlier this year, the government confirmed Kāinga Ora would sell 900 state-owned properties over the next 12–18 months as part of a major portfolio reset. In October, New Zealand’s most expensive state house — a 102-year-old Ponsonby property — sold for more than $3 million.
But the sell-off has drawn criticism following questions about whether Kāinga Ora is underselling assets. In Wellington, the Dixon St flats — sold by Kāinga Ora for $1.04 million under right-of-first-refusal rules — were on-sold less than three weeks later for just over $3 million.
ACT housing spokesperson Cameron Luxton accused the agency of mismanagement, saying Kāinga Ora “undersold the block and scammed themselves".
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