Property price manipulation alleged in Waihi

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

Peter Seers, a financial adviser 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," he said.

Mr Seers became concerned when he inquired 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 properties in Waihi East affected 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 spokesman 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 a purchaser plus top up was entered as the "sale price" in the sales register and with the Real Institute of New Zealand (REINZ), creating incorrect data that could skew market values.

REINZ chief executive officer Helen O'Sullivan said the organisation was unaware 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.

How the scheme 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. The vendor 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 buyer and the vendor receives $200,000. As the house sold at market value, there is no consequential fall in values in the neighbourhood.