7. JUDY TURNER (Deputy Leader—United Future) Link to this
to the Minister of Housing
Is he concerned about the significant reduction in New Zealand’s homeownership rates, reported in a recent survey?
Hon STEVE MAHAREY (Minister of Education) Link to this
The Government believes that encouraging homeownership is an important way of building strong and stable families and communities. In relation to the recent survey, I note that reputable commentators and banks do not accept the findings, which are characterised as extreme, of the recent Wizard Home Loans survey—in fact, one commentator called the assumptions underlying it ludicrous. But the Government does agree that homeownership rates are trending downwards, and that is why the Government has been very active in this area.
Has the Minister considered United Future’s proposal to allow families to capitalise their Working for Families entitlements to purchase a home or increase equity on a home in an effort to encourage an ownership society?
Hon STEVE MAHAREY Link to this
The Government is aware of that proposal, but we have chosen, instead, to introduce the KiwiSaver scheme next year, which will help families get together a deposit for their first home.
Phil HeatleyDoes he think that taxpayers got value for money from the $1.8 million Welcome Home Loans marketing budget, pouring in over $1,000 of promo money per applicant, yet attracting a measly 3 percent of those eligible, or would he do better to address crippling land and section prices through Resource Management Act reform?
Hon STEVE MAHAREY Link to this
I am informed that it costs less than 1c per dollar borrowed to promote this scheme. Every one of the 1,774 families who have used the Welcome Home Loans would prove that it is not a failure. The scheme has helped families who would otherwise be in rental accommodation to buy their own home, and if the member has any advice on how to control the housing market through controlling the price of land, perhaps he could join the Russian Federation.
Jill PettisHon STEVE MAHAREY Link to this
The Government is working hard to make homeownership attainable for more Kiwi families through the Welcome Home Loans scheme, a nationwide homeownership education programme, talking and working with councils on how to increase the supply of affordable housing, introducing the KiwiSaver scheme, and currently developing a new shared equity scheme. I should point out that not one of those policies was followed by the National Government in the 1990s. National did nothing about homeownership.
Pita ParaoneTēnā koe. Is he prepared to investigate the feasibility of establishing dedicated homeownership accounts with the provision of tax concessions for those saving for a deposit as a means of bridging the deposit gap, which is becoming the biggest barrier to homeownership; if not, why not?
Hon STEVE MAHAREY Link to this
Two measures that may help with that are coming up. Obviously KiwiSaver is designed to produce a deposit to close that gap. Secondly, the shared equity scheme is a way of ensuring that the price a person has to pay for a house initially will basically be halved, thereby enabling him or her to get into that house and, as the equity grows, to get a larger share.
Will the Minister consider a modified rent-to-buy programme for State house tenants that uses a share of capital gains over a rental period as a deposit on the property to assist in first-time homeownership, with the overall housing stock to be replenished as proposed by United Future; if not, why not?
Hon STEVE MAHAREY Link to this
That is an excellent idea that is being implemented in a roughly similar way by the British Government. Such a shared equity scheme is being considered here. Officials are currently developing proposals for a new shared equity scheme that would include State house market rent tenants amongst the prospective homeowners. That is being looked at at the moment. In the United Kingdom, shared equity schemes have enabled social housing tenants to buy a share of their house. We in New Zealand have less room for that, of course, because the National Party sold off 13,000 houses. Until we get that kind of stock back it will be difficult to do that here.