Major banks partner with Kāinga Ora in home ownership scheme

Westpac New Zealand and BNZ have announced their partnership with a shared ownership scheme by Kāinga Ora - Homes and Communities, which will be providing an equity contribution of up to 25%, or $200,000, to first home buyers.

Kāinga Ora currently provides public housing tenancy services to over 187,000 public tenants, and manages approximately 65,000 public houses across the country. Under the new First Home Partner product, eligible applicants will receive an equity contribution of a maximum of 25% of the purchase price, or $200,000 - whichever is lower. Kāinga Ora will take an equity share in the ownership of the property, which the household can buy out over time.

Westpac New Zealand and BNZ have become the first major banks to partner with the scheme, and Westpac acting general manager of institutional and business banking Andrew Bashford said that saving for a deposit is often one of the most difficult hurdles for first home buyers to overcome. He said that Westpac has been helping to develop the product in partnership with Kāinga Ora, and the scheme will allow buyers to secure the equity before approaching a bank for lending.

“This is a great example of businesses working together with government to offer greater opportunities for our customers,” Bashford said.

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“We know that saving enough for a deposit is one of the biggest barriers to buying a first home. By contributing equity towards a home purchase, Kāinga Ora is giving customers a big helping hand, and we’re proud to have partnered with them on the framework to help make this possible.”

“We continue to support Housing Foundation shared equity schemes, and we’ve worked with iwi partners to help dozens of whanau into new homes,” Bashford added.

“Another 200 customers are in brand new homes thanks to Westpac Prebuilt - a dedicated lending product for prefabricated housing, which can be faster and more affordable than traditional on-site builds.

“The First Home Partner scheme is another exciting addition to these options for first home buyers. Whatever their aspirations, we encourage people to come and talk to us about how we can help them get on the home ownership ladder.”

BNZ said that the shared ownership scheme would be “especially helpful” for those who would otherwise struggle to save for a deposit - usually 20% of the property’s total price.

House prices have skyrocketed over the last 18 months, with the Real Estate Institute of New Zealand showing a 25% average increase in August compared to the same time last year.

Criteria for lending is also about to be tightened with the incoming CCCFA regulations, and with reinstated LVR restrictions on loans. However, a Westpac New Zealand spokesperson noted that its book of first home buyers has been steadily increasing since last year, and said that it was also preparing thoroughly for the incoming regulatory changes.

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“We are well-positioned to provide households and businesses with lending to support New Zealand’s economic recovery, and we have work under way to ensure we continue lending consistently and responsibly through any regulatory changes,” they said.

“We’re especially committed to supporting Kiwis on to the housing ladder, and helped first home buyers into 3,245 homes in the six months to the end of August – a 26.5% increase on the same time last year.”

For those currently in public housing, being able to achieve home ownership will provide a significant degree of financial security. Commenting on the benefits of home ownership, Voices of Hope co-founder Genevieve Mora said that despite becoming more and more unattainable, it is a vital step in forward-planning and often the ultimate ticket to security.

However, she said that getting outside support has become essential to achieving that goal.

“Owning a home is important for financial security, and for forward-thinking and next steps around having a family, and having a stable, safe environment,” Mora said.

“I know that owning a home is a privilege, because I see a lot of people around me who are not able to do that. Many people are still renting with the dream of still owning a home, but it is becoming more and more unattainable.”

“It provides a sense of belonging and a sense of independence, but it’s often not possible without support,” she said.

“That’s a conversation that I hear a lot, and the majority of the people in my own social circles who own a house have had support from those around them to be able to do so.”