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NZ Accusations of property price manipulation in Waihi

Property Here - Thursday, March 14, 2013

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A complaint has been lodged with the Serious Fraud Office about property prices in Waihi allegedly being manipulated.

Peter Seers, a financial advisor in Auckland, lodged the complaint about Newmont Waihi Gold topping up sale prices to counter any negative effects mining has had on property values in the area.

He said the top up scheme gave an inflated view of property prices in the area.

"Any change to a property value has to be (by) market forces, you can't manipulate it. The market is what it is," said Mr Seers.

Mr Seers became concerned when he enquired about property for sale in Waihi East and was sent the Newmont Waihi Gold Property and Community Investment Policy (PCIP) and its Contribution document which not only detailed the top-up but also included a non-disclosure clause preventing disclosure of the amount of each top-up.

The documents had been distributed in an effort to market the properties in Waihi East which had been effected by the proposed Golden Link Project incorporating the Correnso underground gold mine, which is at the Resource Consent stage.

Newmont Waihi Gold has not been contacted by the Serious Fraud Office regarding a complaint about the Top Up process.

Mine spokesperson Kit Wilson said the Top Up scheme was part of a wider community investment scheme developed by Newmont Waihi Gold in consultation with the community.

"It is open and transparent for both buyers and sellers, based on the concept of willing buyer, willing seller, fair market value and a fair offer. "Top up offers are made at the discretion of Newmont Waihi Gold," Mr Wilson said.

However, Mr Seers said the price paid by purchaser plus top up was entered as the 'sale price' in the sales register and with the REINZ and this led to incorrect data that could skew market values.

REINZ chief executive Helen O'Sullivan said the organisation was not aware of any complaints being laid with the Serious Fraud Office and declined to comment further.

Newmont Waihi Gold has a resource consent application before the Hearings Commission to construct an underground gold mine under 1100 residential properties in Waihi East.

The top up scheme, is one of several property-based Newmont programmes and is available to all properties in the Golden Link Property Area GLPA. Newmont is also purchasing about 6-10 properties in Waihi East each year. In total, 98 out of the 373 privately-owned homes in the Waihi East area affected by the proposed GLPA - Correnso mine are on the market.

How the top up works:

A resident has a house with a market value of $200,000. He has the property listed for sale at $210,000. It has been on the market for nine months. He receives a firm offer of $185,000 and he approaches Newmont Waihi Gold which agrees to top up the offer by $15,000. The seller accepts the offer at $200,000. The $15,000 is paid to the purchaser to top up the offer and the seller receives market value ($200,000).