Kainga Ora Chief Executive Andrew McKenzie must explain himself to Parliament in light of a startling admission that he made misleading comments in reply to my questions in a recent Select Committee hearing, National’s Housing spokesperson Nicola Willis says.
“On the 9th of June during a select committee estimates hearing, I asked Mr McKenzie about concerns that Kainga Ora has been using the taxpayers cheque book to outbid private sector developers and push-up property prices.
“I raised the specific example of a property Kainga Ora bid for 686 Swanson Road, Auckland for which Kainga Ora had allegedly offered $36 million whereas the nearest under-bidder allegedly made a bid of $26 million.
“Mr McKenzie replied noting that “the winning tenderers were a small amount below us” and “the purchaser purchased it for within $2 million of the amount that we had assessed it, subject to due diligence’.
“Subsequent investigations and parliamentary questions indicated that the property sold for $30 million whereas Kainga Ora had offered a staggering $38.5 million.
“These figures suggested Mr McKenzie’s statements to the Committee were false and misleading.
“Mr McKenzie has now written to the Social Services Committee to ‘clarify’ his statements acknowledging ‘the final purchase prices was $8.375 million less than the conditional offer that Kainga Ora made’.
“This is alarming and shows my original concern about Kainga Ora was well-founded, despite Mr McKenzie’s dismissal. Kainga Ora offered almost 30 per cent more for this property than the nearest bidder, raising serious concerns about their approach to assessing property value.
“I will be writing to the Select Committee seeking to recall Mr McKenzie for a briefing so he can explain this conduct and address my underlying concern about Kainga Ora’s cavalier approach to property purchase offers.
“There is a widespread view in the community that Kainga Ora is routinely overbidding for properties. This revelation about Swanson Road comes on the back of news that Kainga Ora paid $8.1m for a motel in Rotorua that was valued for significantly less.
“Land prices are skyrocketing in New Zealand stifling housing supply and the Government’s housing arm should not be responsible for driving them up any further.
“Mr McKenzie must explain what appears to be blatantly misleading the Select Committee, and Housing Minister Megan Woods must explain what constraints she will put on Kainga Ora to stop them driving up the price of housing in New Zealand.”
Note:
Link to select committee transcript from 9 June 2021
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