In a significant development for the Wairarapa region, Kāinga Ora - Homes and Communities confirmed today that its proposed social housing projects in both Greytown and Featherston will not proceed. This decision is part of a nationwide financial reset aimed at stabilising the agency's balance sheet and sharpening its focus on value-for-money investments.

The Financial Reset: A Nationwide Course Correction

The agency recently completed a comprehensive review of its 466 social housing delivery projects and vacant land holdings across New Zealand. The review aimed to ensure that only those projects offering strong financial viability and alignment with government housing priorities would proceed. As a result, 254 projects are moving forward while 212, accounting for nearly 3,500 proposed homes, have been halted.

The decision has led to estimated accounting write-downs between $190 and $220 million, reflecting sunk costs in scoping and planning of now-cancelled projects and devalued land holdings. Despite the scale of these write-downs, Kāinga Ora remains confident in its long-term financial outlook, citing a robust asset base that has grown by $28 billion over the past decade to approximately $49 billion.

Implications for Greytown and Featherston

Among the cancelled projects are two Wairarapa locations:

East Street, Greytown (4 units)
Woodward Street East, Featherston (7 units)

Both sites were earmarked for small-scale developments that would have contributed to the state housing stock in these growing communities, where population growth has placed increasing pressure on housing affordability. Their cancellation underscores the difficult trade-offs Kāinga Ora is making as it reorients its portfolio towards higher-priority areas with greater demand for public housing supply.

Land Sales and Future Opportunities

In parallel with the project cancellations, Kāinga Ora is preparing to sell approximately 36 hectares of surplus land across the country, valued at around $132 million. Although most of the larger sites being sold are located in Auckland and Wellington, smaller vacant parcels are also being prepared for sale.

Kāinga Ora emphasises that these sales are designed to strengthen its financial position and create opportunities for private developers and Community Housing Providers to contribute to New Zealand’s housing supply. The agency notes that market conditions and due diligence outcomes will continue to influence which properties ultimately proceed to sale.

A Cautionary Tale for Regional Growth

For communities like Greytown and Featherston, the cancellation of these projects highlights the challenges smaller centres face in attracting and securing government-led housing investment. With population growth continuing to place pressure on local housing markets, the need for strategic, regionally-tailored solutions remains acute.

Planalytics will continue to monitor the evolving implications of Kāinga Ora's reset, particularly for smaller, fast-growing towns where the intersection of land availability, infrastructure capacity, and public housing needs creates both risks and opportunities.

Sources: Kāinga Ora Financial Reset (June 2025); Project Assessment and Write-Downs Information Sheets (June 2025)