05-03-2012

Govt pays $600m to repair state houses

Stuff.co.nz

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State houses are costing about $3000 a year each to repair and maintain.

Figures show Housing New Zealand has paid more than $600 million in repair bills over the past three years.

Property Investors Federation president Andrew King said the annual $3000 bill was on the high side, and he recommended private rental owners put away about $1200 a year for repairs.

He said the high cost highlighted inefficiencies in Housing NZ operations when private owners kept costs down by carrying out work themselves, and by doing it sooner.

Many rental property investors chose low-maintenance brick and tile homes because older, weatherboard houses generally had higher maintenance costs, making them less attractive.

A Housing NZ spokeswoman said the level of maintenance spending was vital to the upkeep of properties. The cost included upgrading properties to make them warmer, and also repairing damage caused by tenants.

Maintenance costs dropped nationwide, from $216 million in the 2008/09 financial year to $179m in the last financial year. But those figures could increase as Housing NZ prepares for a major shakeup in Auckland, where about half of the city's 30,600 state houses are to be upgraded, and another 1400 built over the next five years.

The country has 68,460 state houses, and tenants caused more than $8m worth of damage to them in the last financial year, down from $10.3m the year before.

One tenant caused $23,662 worth of damage to a south Auckland property that needed extensive repairs when the tenant moved out after 10 years.

The next biggest bill – $22,412 – went to a tenant in the Bay of Plenty, and a tenant in Auckland caused $22,360 worth of repairs after they excavated the basement.

Housing NZ carries out inspections and damage bills are charged back to those responsible.

The majority of homes are two or three-bedroom properties but there are also 855 bedsit units. The average number of occupants is three but there are two Housing NZ homes housing 15 people each.

Auckland tenants were the most likely to be evicted. Housing NZ issued 354 90-day eviction notices between July 1, 2009, and June 20, 2011, with more than half (188) in Auckland. The highest number of evictions, 207, were for dishonesty.

Auckland is also home to the 10 most expensive state houses, the most expensive being a three-bedroom home in east Auckland valued at $1.29m. Housing NZ sold 198 state houses last year, four for more than $800,000 in Auckland.

COUNTING THE COST

Source: Stuff.co.nz