Kiwis struggling to take the plunge into the housing market could be in luck.
The Government is considering an equity share scheme to assist first home buyers onto the property ladder.
The proposed scheme is offering a sweet after the sour pill that the KiwiBuild starter price is lifting from $600,000 to $650,000.
The shared equity scheme would allow potential homeowners to co-own their property with a bank or Government agency, which could save some up to $100 per week.
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Housing strategist Leonie Freeman joined Ryan Bridge and Lisa Owen on Drive to share her thoughts on the scheme and how she believes it could work.
Such a scheme was previously piloted by a Helen Clark-led Government back in 2008, which Freeman believes wasn’t a success.
Whatever they did then, it didn’t work.
The Labour Government wanted to launch the scheme for 500-700 homes, when in reality, Freeman pointed out that they only offered 21 loans.
“Whatever they did then, it didn’t work,” she told RadioLIVE.
If the the Government met homeowners halfway with its $2 billion budget, Freeman estimates that it could provide loans for about 6,000 homes with a $650,000 price tags.
New Zealand already has successful programmes for struggling homeowners, Freeman explains, like New Zealand Housing Foundation, Dwell and LoanCo.
“My first recommendation is we actually look at what’s working and then figure out how to scale up.”
While she applauds the Government for looking into such a scheme, she warns that New Zealand needs to opt for a programme that will work within the existing market.
“We’ve got to be really smart with the money that we’ve got, because we don’t have enough to do everything.”
Listen to the full interview with Leonie Freeman above.