Bob Edlin: The deal that an ACT MP says shows how Kainga Ora scammed themselves

An iwi has made a profit of around $2 million by flipping Wellington’s Dixon Street flats for just over $3 million less than three weeks after buying the block from Kāinga Ora for $1.04 million.

OneRoof reports that Taranaki Whānui Limited resold the flats after buying it for much less than the market valuation from the state housing agency.

The purchaser, the Wellington Company, plans to develop 117 apartments at the site, preserving its historic status.

David Farrar drew PoO’s attention to the deal in a post on Kiwiblog.

He comments:

Good on the iwi – they made $2 million. Bad on Kainga Ora for being stupid.

Property records show Taranaki Whānui Limited, the commercial organisation set up to manage the Treaty settlement package for Wellington iwi, sold the landmark social housing block to a company linked to prominent developer Ian Cassels.

Both sale prices were significantly below the property’s market value of $4m and the RV of $18.9m.

The flip has been criticised by ACT housing spokesman Cameron Luxton, who called on Kāinga Ora to explain why it sold the property for the price it did.

“No one would behave like that if it was their own money on the line. It looks like they’ve scammed themselves,” he told OneRoof.

The agreement between Kāinga Ora and Taranaki Whānui Limited was signed on June 25.

Twenty days later, on July 15, Taranaki Whānui Limited sold the building for $3.04mto Dixon Reboot Limited, which OneRoof says is linked to Cassels’ development firm The Wellington Company. Both transactions were settled on August 14, 2025.

Daniel Soughtton, Kāinga Ora’s deputy chief executive for central, told OneRoof that when Kāinga Ora first offered the Dixon Street Flats to iwi under the Right of First Refusal (RFR) process in their Treaty settlement, Taranaki Whānui Limited had initially offered to pay a lot less.

“The opening offers they made on the property were low. We negotiated with them to bring the price up. While the $1.04m price we settled on was nearly $3m lower than the market valuation we had obtained, there was no guarantee we would get a higher price if we put the property on the open market, given its challenges and the scale of investment needed.”

Soughtton told OneRoof Kāinga Ora approached other developers with the financial means and development capacity to take on the project as part of its initial market testing but they were either not interested or cautious.

Farrar agreed there was no guarantee of a higher price being offered if the property had been put on the open market.

But you don’t need to be Einstein to work out that if the market value is $4 million, there would be no shortage of companies willing to pay much more than $1 million for it.

A right of first refusal is not a commitment to sell at any price regardless.

OneRoof is published by OneRoof Limited and is owned by NZME, an integrated New Zealand media company that owns OneRoof, along with other media assets like the NZ Herald and various radio stations.

The post by David Farrar can be read on Kiwiblog HERE.

Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.