The government has put on hold the sale of hundreds of Housing New Zealand homes in Invercargill after the only group to submit a proposal pulled out.
Photo: RNZ / Alexander Robertson
The state houses are part of the government's plans to sell up to 2000 properties across the country this year to registered community housing providers.
The minister responsible for Housing New Zealand, Bill English, said Pact withdrew from buying 348 houses in Invercargill because it did not fit with its plans to provide for the community. He said it was the only group invited to submit a proposal.
Pact supports people with intellectual and other disabilities in Southland, Otago, West Coast and Wellington.
Mr English said the government has put the process on hold in Invercargill until it can assess other options.
The process for selling 1134 properties and tenancies in Tauranga is still underway.
Government should can state house sales - Labour
The Labour Party said the news shows the government's plans to sell state houses are "a shambles".
Labour's housing spokesman Phil Twyford says it was a bad policy from the start.
"Its been implemented incompetently, and it's time to go back to the drawing board.
"What the government should do here is cancel the planned sale of state houses and back away from the whole policy."
Mr Twyford said the group that pulled out of buying houses in Invercargill is the second group to do so.
Prime Minister John Key said the loss of the sale in Invercargill does not mean the social housing plan is faulty.
"That's one particular provider, and in the end will another one come through - I suspect so. If they don't, does it matter, well not really. I mean ultimately if we don't get the capital from there we can put another capital in from somewhere else."
Invercargill houses may be sold cheaply - Greens
The Green Party said the government may try to sell off state houses for less than they are worth, after Pact pulled out of taking over the Invercargill state houses.
The party's social housing spokesperson, Marama Davidson, said tenants of the Invercargill houses had told her the properties were in poor condition.
She said the risk now is that the government will sell them cheaply, to make their social housing plan look like a success.
"That's a real worry, we would totally be losing out if that was the case."
Mr Key said the Invercargill houses won't be sold at rock-bottom prices.
Ms Davidson said the state houses should be taken off the market.