Despite having thousands of people on waiting lists, including hundreds in Otago and Southland, Housing New Zealand is selling three-bedroom state houses because its clients want smaller or larger homes.
Rather than hold "surplus stock", the accommodation provider is selling 11 state houses in Otago and Southland - with more to follow, Housing New Zealand southern regional manager Sharon Matson says.
Increased demand for smaller (one or two bedrooms) or larger (four or more bedrooms) state houses had resulted in declining demand for three-bedroom homes nationwide, she said.
"There is currently very low demand for three-bedroom state houses in the Dunedin area, where there is mainly a need for one or two-bedroom properties."
When asked if it was the right time to sell state houses given the falling property market, Ms Matson last week said Housing New Zealand did not hold "surplus stock because of the cost to maintain properties".
Empty houses could become a target for vandals, she said.
"We consider it is better to offer it for sale."
Money from the sale of properties in Otago and Southland would go to regions with the greatest demand for housing stock, she said.
With almost 10,000 people on the national waiting list, tenants were given the opportunity to move "elsewhere in the country" if they wanted to, she said.
Housing New Zealand staff would look at putting someone eligible for a two-bedroom property into a three-bedroom house.
"However, a larger home means more expensive running costs, such as heating, for tenants.
"Consequently, we always look to house people in homes that best meet their needs and circumstances."
A recent property search by the Otago Daily Times found that of five Dunedin state houses being marketed by Ray White, three were two-bedroom homes and two were three-bedroom homes.
Ms Matson said two of the properties had sunrooms and were "classified as a three-bedroom property by Housing New Zealand".
The other property was on a "difficult site and has ground maintenance issues".
Of the five properties, four were selling for thousands under capital value, and one was advertised under the heading "Bag a Bargain".
Most of the weatherboard homes were built in the 1950s, and were listed on the open market for the first time.
Dunedin South MP Clare Curran said she would be seeking a briefing from Housing New Zealand this week about the sale of Dunedin state houses.
It was a concern if homes were not being built in the region after the sale of any state houses, she said.
In a Housing New Zealand briefing to the Minister of Housing in November, it was noted the supply of state housing was "insufficient to meet reasonable demand during a downturn".
The Government was expected to sell a large number of state homes to tenants later this year, a move supported by the Minister of Housing Phil Heatley, a spokesman said.
