The government's new shared home equity scheme will do little for those who most want to get on the home ownership ladder, a charity claims.
Between 500 and 700 households are expected to be signed up in
the $35 million scheme.It will see the government provide an
interest-free loan on a house of between 5% to 30% of its
value.
The scheme will be limited to those with a household income up to
$85,000, who meet certain criteria.
Salvation Army Social Policy Director Campbell Roberts says the
high price of housing in areas like Auckland means only a few
families will get help, and that the $35 million will not go far in
the more expensive property markets.
Major Roberts says the amount of money that has been allocated does not give the scheme a real chance to get off the ground.
He says the government should work with community organisations which are already running successful shared equity schemes.
The government has been criticised for failing to find a comprehensive solution to the affordable housing crisis. The new scheme, it was hoped, would take some of the pressure off first-time homebuyers.
A shared equity pilot scheme starts in July, and will only be available in Auckland, Wellington, Nelson, Christchurch, and Queenstown - the regions with the highest prices.
Major Roberts says the price caps in the scheme will push qualifying families into the cheapest houses available.
He also believes the scheme in its current form favours families without children, who are seen to have more disposable income.
But the Salvation Army's view is not shared by Damian Piggin, an Auckland real estate agent believes there are plenty of options for new home owners under the Government's shared equity scheme.
Loan recipients must earn less than $85,000, and there's a cap on the value of the home they can buy.
In Auckland, it's $305,000.
Piggin, an agent with Ray White, says the amount
is plenty for a two bedroom inner city apartment - he also
says that the quarter acre home dream is no longer a viable option
for all but the wealthiest.
For more information on the shared equity scheme
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