Investors cash-in on state housing sell-off in Christchurch

Saturday, 14 March 2026

Christchurch has become a hotspot in a nationwide sell-off of public housing, with state houses leaving government ownership faster than anywhere else in New Zealand.

Nearly 150 Kāinga Ora homes have been sold in the city since July, with more still on the market. The agency has also sold two large landholdings and recently listed a third.

The Christchurch sales have already raised at least $65 million, contributing to more than $330m raised nationally from house sales. Kāinga Ora says selling older homes allows it to replace them with higher-density developments or newer homes elsewhere, but it remains unclear whether some regions will lose homes while others gain them.

The sales have already pushed Christchurch’s public housing numbers backwards. In the second half of last year the city lost a net 86 public housing units — the first six-month decline since at least 2017. That was despite an increase of 22 houses supplied by other community housing providers.

Many of the homes are being sold “as is, where is”, meaning Kāinga Ora does not repair them or guarantee their condition. In some cases earthquake repair records are not provided, and some properties appear visibly run-down, with holes in walls, torn carpet and overgrown sections.

That combination — poor condition and “as is, where is” status — appears to contribute to lower sale prices. Most properties have sold for significantly less than the automated market estimates from homes.co.nz at the time of sale. The estimates are algorithm-based and reflect what a typical house in a neighbourhood might sell for, rather than the actual condition of each property.

The situation has proved lucrative for some buyers. Nearly one in five of the properties have already been resold, with a median gain of about $165,000. In some cases, buyers appear to have renovated or repaired the homes before selling them again.

Among them were two neighbouring state houses in Opawa, bought for $490,000 in September. They were resold six weeks later for $660,000 and then advertised for rent. A unit in Papanui was bought for $440,000 and then resold seven weeks later for $492,000.

One investor has bought four Kāinga Ora properties, renovated them, and resold three. Two sold for a combined $330,000 above their purchase price, another for $165,000 more, and the fourth is currently listed with an asking price $250,000 higher than what was paid three months ago.

The reset

Kāinga Ora plans to sell about 900 properties nationally as part of a “financial reset”.

It follows a critical 2024 review of the agency’s finances, led by former prime minister Sir Bill English. The review found its balance sheet had deteriorated rapidly after an ambitious building programme collided with rising construction costs, inflation and higher interest rates.

So far, sales have been disproportionately concentrated in Christchurch. About 2% of Kāinga Ora’s properties in the city have been sold — a higher share than in comparable centres including Auckland (0.7%), Dunedin (0.6%), Hamilton (0.56%) and Lower Hutt (0.17%).

Wellington city has the highest disposal rate, but that figure is skewed by the sale of the Dixon St Flats, which have not been tenanted since late 2024. With the flats excluded, 0.42% of the city’s Kāinga Ora houses have been sold.

Caroline McDowall, Kāinga Ora’s general manager of housing delivery, said the agency was undertaking “the most significant upgrade of state housing ever seen in this country”.

“We sell older properties that are costly to maintain and are no longer fit-for-purpose so we can reinvest in new and improved housing,” she said in a statement.

“This enables more people and families to benefit from modern, fit-for-purpose homes.”

Kāinga Ora had delivered 1615 new homes in Christchurch since 2021, she said, increasing its housing portfolio in the city by 14%. About 100 new homes are expected to be delivered by June, while the agency continues its renewals programme.

“After several years of significantly increasing our social housing stock in Christchurch, we are now focusing on improving our older homes across the city.

“Over the next 30 years we will extensively renew or replace more than half our 78,000 homes across the country.”

Future plans

It remains unclear whether the recent drop in Kāinga Ora’s housing stock in Christchurch will be temporary.

The agency announced in June it would stop 212 of its 466 planned social housing projects nationwide, after the Government directed the agency to scale back projects that no longer met financial thresholds. The decision resulted in write-downs of about $80m.

Christchurch was hit particularly hard. The city’s pipeline of Kāinga Ora homes was cut from an estimated 458 units to about 85. Other areas have since been identified for possible development, but few details have been released.

Among the cancelled projects was a 108-unit development in Sockburn, written down for about $1.4m.

Two projects in Riccarton, with 44 and 36 planned units respectively, were also scrapped, resulting in write-downs of about $600,000. One had already involved demolishing 54 existing units, while land for the other — a former holiday park the agency bought in 2023 — has since been listed for sale.

Kāinga Ora also cancelled plans for a 39-unit development in Phillipstown and 26 units in Bryndwr.

The agency has also sold several large landholdings, including a site in Halswell it bought with much fanfare in 2023. The sale price has not been disclosed. It has also sold land in Richmond spanning nine titles.

When asked whether the sold Christchurch properties would be replaced like-for-like in the city, the agency did not give a direct answer.

“For each existing property sold, a newly built home is delivered elsewhere, which means we are not reducing the overall number of homes Kāinga Ora owns across the country,” McDowall said.

First-home buyers missing out

For decades, former state houses were an entry point into home ownership. But despite the recent influx of lower-priced homes onto the market, first-home buyers appear to be missing out.

Property records reviewed by The Press show more than half of the Kāinga Ora homes sold in Christchurch were bought by investors or developers.

One reason may be the “as is, where is” condition attached to many listings. Such properties can be difficult to finance because banks are often reluctant to lend on homes that cannot easily be insured or lack full documentation.

As a result, the homes are frequently bought with cash or large deposits, giving investors and developers an advantage over first-home buyers.

Some real estate listings suggested speed was also a priority. Several said Kāinga Ora had given “clear instructions” to sell quickly, while others noted cash offers were preferred. In some cases, homes appeared to be discounted to secure a faster sale.

Kāinga Ora says every home considered for sale receives an independent current market valuation. In Canterbury, its houses have sold for an average of 5.3% above those values.

“We always aim to get the best price possible for the properties we’re selling, so we are listing them on the open market,” McDowall said.

“When a property sells for less than we expected, we weigh that against the overall return from all the properties we are selling.”

Homes were being sold “as is, where is” for “consistency across our national sales programme”, she said.

Jill Hawkey, head of community housing provider Christchurch Methodist Mission, said the profits being made on on-sold state houses were “appalling”.

Her organisation bought a two-bedroom flat from Kāinga Ora last month for $345,000, close to automated market estimates.

Hawkey said housing need in Christchurch remained significant. While about 1500 people are officially on the social housing register, her organisation’s outreach workers had found others who believed they were registered but were not.

“People are sitting there on the streets believing they’re on the register, waiting for a house,” she said.

“There just isn’t enough social and affordable housing.”

She said the recent decline in public housing — combined with uncertainty about future developments — was concerning.

“If you compare us with other countries around the world, New Zealand’s percentage of state housing is very low… we really only have about half of what other OECD countries have.”

Ōtautahi Community Housing Trust chief executive Cate Kearney said the barrier for many low- to middle-income buyers was not just price, but access to finance.

The organisation, which operates both public housing and an affordable home ownership scheme, had heard from aspiring buyers competing with investors and cash buyers for the cheapest homes.

“All this means many households are navigating a very narrow path into ownership,” she said.

Kāinga Ora is Christchurch’s largest single property owner, with more than 7000 homes. A further 2000 are managed by community housing providers.

As of November 2025, 1455 people were on the public housing waitlist in Christchurch. That is down from more than 2000 in early 2024, but still well above pre-2020 levels.