Kāinga Ora Cuts Peak Debt by $9.5b in First Year of Turnaround

“Kāinga Ora’s turnaround is an excellent example of our Government’s drive to fix the basics and build the future,” Mr Bishop said.

One year after the launch of Kāinga Ora’s Government-endorsed Turnaround Plan, the agency has slashed projected peak debt by $9.5 billion, reduced operating costs by $211 million, lowered build prices, and lifted tenant satisfaction to record highs.

Housing Minister Chris Bishop and Associate Housing Minister Tama Potaka say the results mark a major reset for the country’s largest social housing provider.

“Kāinga Ora’s turnaround is an excellent example of our Government’s drive to fix the basics and build the future,” Mr Bishop said.

Debt Blowout Reversed

When the Government took office, Kāinga Ora’s debt had surged from $2.3 billion in 2017/18 to $16.5 billion in 2023/24, with forecasts showing it climbing to $24.8 billion by 2026/27 — and peaking at $29 billion by 2032/33.

“One year into the Turnaround Plan, debt is now expected to peak earlier in 2029/30 at $19.5 billion,” Mr Bishop said.

That represents a $9.5 billion reduction in projected peak debt.

In 2024/25 alone:

• Operating savings target: $41 million

• Actual operating cost reductions achieved: $211 million

The savings have been delivered alongside improved operational performance.

Strong Delivery While Resetting the Books

Despite the financial reset, Kāinga Ora continues to deliver homes.

In 2024/25 the agency:

• Delivered 3,456 new homes

• Upgraded 874 existing homes

• Added 2,564 net new homes, exceeding its 2,230 target

For now, the agency is maintaining stock at around 78,000 homes, while focusing on quality upgrades and better portfolio management.

By 2030, approximately 11,500 older homes are expected to be renovated or replaced. To fund this, Kāinga Ora is selling unsuitable, high-maintenance properties — including multimillion-dollar 1920s villas — and reinvesting proceeds into warmer, drier, appropriately sized homes.

“It’s a no-brainer to sell homes that are unsuitable for social housing and reinvest that money into better-quality homes in the right locations,” Mr Bishop said.

Build Costs Trending Down

The Turnaround Plan also targeted excessive construction costs.

In 2022/23:

• Average build cost: $3,433 per square metre

• Costs were 12% higher than the private sector

One nine-unit development in Auckland cost taxpayers $11 million to build — $1.2 million per apartment.

Following standardised housing designs and procurement reforms:

• Build costs averaged $3,290 per square metre in Q1 2025/26

• The agency is on track to meet its $2,980 per square metre target by June 2026

Tenant Satisfaction and Community Safety Improve

Associate Housing Minister Tama Potaka said improvements extend beyond the balance sheet.

Tenant satisfaction has risen sharply:

• Overall satisfaction increased from 80% to 87%

• Tenants feeling safe rose from 70% to 90%

Vacancy rates have fallen from 5% in late 2023 to 2% in December 2025, allowing more families to access housing.

Rent arrears have also dropped significantly:

• June 2024: 8,600 tenants in arrears

• December 2025: 5,500 tenants in arrears

Tougher Line on Anti-Social Behaviour

The Government has taken a firmer stance on disruptive tenants.

• 2022/23: 2 tenancies ended for disruptive behaviour

• 2023/24: 12 ended

• 2024/25: 75 ended

“Moving tenants on is a last resort, but at some point, enough is enough,” Mr Potaka said.

Complaint resolution times have improved dramatically:

• End of 2023: 72 days average

• December 2025: 10 days average

Focused on Core Purpose

While Budgets 2024 and 2025 funded over 2,000 additional Community Housing Provider places for delivery between July 2025 and June 2027, Kāinga Ora itself is currently focused on financial stability and portfolio quality rather than rapid expansion.

“Kāinga Ora is now focused on its core purpose of being a good social housing landlord and delivering better outcomes for tenants and communities, while providing better value for taxpayers,” Mr Bishop said.

Ministers thanked the refreshed Board and staff for delivering what they described as rapid, measurable improvements.

“The Turnaround Plan shows that clear direction and discipline can deliver significant improvements quickly. This Government will continue to hold Kāinga Ora to account.”