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It took digger driver Jeremy Blackler just a few hours in the morning to bring down the three-bedroom home, which had stood on the Roche St site since the late 1970s.
Demolishing the house "wasn't difficult" and the remaining concrete slab and garage would be removed on Monday, he said.
The former teacher's residence had been unoccupied for some time as it had not been fit for purpose.
Plans for the new house have been lodged with the Queenstown Lakes District Council and site preparation work was due to start very soon.
Mr Howard said the school intended to build a second four-bedroom home on the Roche St site. The first house should be finished by December and ready for occupation in the new year.