Kiwis back shared equity schemes
Many New Zealanders would support government-backed "shared equity schemes" to help first home buyers, as they struggle with high prices across the country.
Thursday, June 21st 2018, 12:41PM
A study from Horizon Research reveals 41% of people would support shared equity schemes to help people get on to the property ladder. Horizon surveyed over 1,300 people.
Shared equity schemes have been launched by governments in countries such as the UK, with mixed success. They allow buyers to take all of the equity in a home with the support of a shared equity loan. In Britain, the loans are interest-free for the first five years and rise with the value of a property. Builders also offer shared equity programmes.
A total of 41% of New Zealanders said they would support a scheme for first-time buyers, backed by "government and others". They said they would back equity support for homes worth between $500,000 and $600,000. A total of 19% of people opposed the idea, while 25% said they “strongly” supported the proposal.
The current coalition is leaning towards equity support schemes. Housing Minister Phil Twyford recently said: "I've got officials working on shared equity because we know that even the Kiwibuild price brackets are not affordable for lots of people." According to Horizon, Labour, National, New Zealand First and Green Party voters are more likely to support the schemes.
Recent government data shows first home buyers are struggling to afford homes in New Zealand’s major cities. Recent data on affordability from the Ministry of Business Innovation and Employment found that first home buyer households "with below average income after housing costs" rose from 77% in March 2016, to 80% in March 2017.
While evidence suggests first time buyers are finding it difficult to secure a property, recent data shows they are becoming a bigger part of the market, as moves to curb investor spending take effect. The Reserve Bank’s latest data for April reveals first home buyers made up 16% of the mortgage lending market, their biggest share in a decade.
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