Kāinga Ora to sell Tauranga land at a loss after scrapping 1,000-home plan
New Zealand’s state housing agency, Kāinga Ora, is preparing to sell a 95-hectare Tauranga site it bought for NZ$70.4 million in 2021. The decision follows the scrapping of plans to build 1,000 homes on the former Ferncliffe Farm. Officials now admit the agency is likely to sell the land at a loss due to shifting stock market conditions.
The move has reignited criticism over the original purchase price, which some argue was inflated compared to private developer offers. Kāinga Ora has defended the deal, citing independent valuations and expert advice at the time.
Kāinga Ora acquired Ferncliffe Farm in 2021 after outbidding private developers, including Classic Developments. Co-director Peter Cooney confirmed his company was in the running but lost to the state agency’s higher offer. An internal briefing later described the purchase as 'over market value', noting that it failed to account for significant development risks.
Originally, the agency planned to construct 1,000 homes on the Tauriko West land. However, it has since refocused its priorities on delivering social housing more cost-effectively. Acting general manager Nick Howcroft stated the 2021 purchase was justified by two independent valuations and professional advice. The land is now being considered for sale to Summerset Group Holdings, a major retirement village developer. Tauranga City Council strategy manager Christine Jones highlighted the site’s potential, as it sits within the Tauriko West urban growth area, estimated to accommodate at least 3,000 homes. Yet, property experts warn that land values have declined since Kāinga Ora’s purchase. CBRE national director Mark Passey noted a general drop in development land prices. Cooney agreed, predicting the agency would sell at a loss under current stock market conditions. Kāinga Ora has acknowledged the financial shortfall but has not disclosed an expected sale price.
The sale of Ferncliffe Farm marks a shift in Kāinga Ora’s strategy, prioritising financial prudence over large-scale development. The agency’s decision to exit the project comes as Tauranga’s property market cools, reducing the land’s value.
If sold to Summerset, the site could still contribute to housing growth, though under private rather than state-led development. The outcome will confirm whether Kāinga Ora’s initial investment aligns with its long-term goals for social housing delivery.
