Auckland has so many ghost houses because of new rental laws, says a property developer who has "given away" a run-down home rent-free for a year.
The developer of 25 years told Newstalk ZB he had offered an Auckland home he bought last year to an Australian family and told them they could live there rent-free till he furthers plans to build on the site.
The developer paid $1.92 million for the house at 9 Francis Street in Grey Lynn. The house itself was in a run-down state but its location in a popular inner-city suburb and section size pushed its sale price well above its CV.
"I'm the big ugly capitalist pig. I've given it to an Australian family over here for a year rent-free and they're going to do some work on it which they are right now. I said, 'mate I don't want any money because I'm going to build a couple of houses for my son and daughter and they're going to have flatmates'. I've said, 'mate you can have it'," the developer said.
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The new owner said he was not technically renting the house so no one could complain about the standard of the house.
"I'm only trying to help one family. It's not costing me anything. I'd have to pay the rates anyway," he said.
He plans to demolish the house and he expects to take about a year.
The house at Francis Street in Auckland's Grey Lynn fetched $200,000 above its CV at auction. Photo / Supplied
"A lot of guys who own houses, especially in Ponsonby, they can't meet these new laws. They've had to leave them empty. What else do you do, because you'll be breaking the law even if you rent them out cheap? There's one in the paper today, derelict-looking house in Ponsonby, and that's not insulated, and if you rented that out, can you imagine the fines you get? I don't think Jacinda has done any favours bringing these new laws in," he said.
The developer asked not to be named and said he was not seeking publicity for what he had done. He had met the new occupant at a sports match.
The Government says its Residential Tenancies Act reforms means houses are warmer and drier and more fit for purpose.
Well-insulted houses with adequate heating and smoke detectors aim to improve living standards for more than one million tenants.
Further reforms plan to restrict landlords' rights to give notice to tenants and raise fines but those changes are yet to be enacted.
Jennifer Sykes, a manager at the Ministry of Business, Innovation and Employment, said the Residential Tenancies Act does not apply if there is no rent charged in any form in exchange for residential use of the property.
"A landlord cannot avoid their legal obligations under the Residential Tenancies Act by charging unconventional forms of rent, which are not money," she said.
"If there is no tenancy agreement, both parties are still protected by other laws, which consider water, heating and a safe environment.
"A property that could be deemed unsafe or unsanitary by the local council may be illegal for residential use."
The house at 9 Francis St went for just over $200,000 above its rateable valuation of $1.7m late last year.
Repeka Lelaulu of Barfoot & Thompson announced the sale of the house only 10 minutes from the CBD and surrounded by extensively renovated homes valued in the $1.8m to $2m and $2.4m category.
With its tiled roof and small footprint on a relatively bare section in the tree-lined street between Warnock St and Old Mill Rd, she said the house went for $300,000 above a pre-auction offer.
Economists have forecast that three flat years in Auckland's property market are ending.
The Grey Lynn deal is being seen by those in the area as evidence of buyer confidence returning.
Fresh from success, Lelaulu dropped "urgent properties needed" flyers in letterboxes before Christmas.
