Kāinga Ora Chief Exec misled Select Committee

Kāinga 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 Kāinga 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 Kāinga Ora bid for at 686 Swanson Road, Auckland for which Kāinga 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 Kāinga 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 Kāinga Ora made’.

“This is alarming and shows my original concern about Kāinga Ora was well-founded, despite Mr McKenzie’s dismissal.  Kāinga 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 Kāinga Ora’s cavalier approach to property purchase offers.

“There is a widespread view in the community that  Kāinga Ora is routinely overbidding for properties. This revelation about Swanson Road comes on the back on news that  Kāinga 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 Kāinga Ora to stop them driving up the price of housing in New Zealand.”

Link to Select Committee transcript from 9 June 2021.

Letter from Andrew McKenzie, Kāinga Ora Chief Executive.