17 Aug 2015

Uncertainty over who will buy state houses

9:45 am on 17 August 2015

Finance Minister Bill English says it will be months before the government knows who is serious about taking over state houses.

The government is pushing ahead with plans to sell up to 2000 thousand state houses, starting in Tauranga and Invercargill.

Bill English talking on Solid Energy.

Bill English (file) Photo: RNZ / Chris Bramwell

Two Australian community housing providers have said they are interested in leasing the houses and managing tenancies, but not in buying the properties.

Some local groups have said the same.

Mr English says it was a new process and would take a while, but there had been good interest at Treasury market briefings around the country with up to 60 people at each event.

"There's a lot of discussion has to go on with a wide group of people ... talking about the state of the stock, the nature of the tenants that are in them, the condition of the property and then the terms and conditions discussed over which there might be a sale or other alternative transactions in that process."

The process still had months to run and was "all new for everybody," he said.

"One of the reasons it takes a while is that the government has to make sure it understands all about the rental stream and the buyers want to know what the income is going to be."

Potential buyers also had to understand who the tenants were, and what the houses were worth.

"It's thrown up a wide range of issues that haven't been grappled with before, all of them constructive, but it's going to be another few months before we see who is seriously interested rather than who's just showing up to the meetings."

Mr English said some people had said at the meetings they were interested in leasing rather than buying, and the government would investigate that, but it was an ongoing discussion.

It was likely there would be some sales of state houses, he said.