Affordable housing options for Kiwis
![Shared equity could boost NZ homeownership](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/us/076/0292_638573539146862743.png)
New Westpac NZ research showed that homeownership rates in New Zealand have fallen below 60% and are projected to drop below 50% by 2048 based on current trends.
Potential for shared ownership
According to the Westpac NZ Shared Home Ownership Report, 152,000 lower- and middle-income Kiwi households could be eligible for affordable shared equity and leasehold pathways to help them own a home.
An estimated 10,000 additional shared equity and leasehold homes could be built within three years if immediate barriers are removed.
Westpac’s commitment
Westpac NZ CEO Catherine McGrath (pictured above) announced the bank’s target of at least $1 billion in lending to affordable housing solutions over the next three years.
“The number of shared equity and leasehold houses being offered by community housing providers is currently small, but the positive impact for families is large,” McGrath said.
The need for awareness
The report found that most eligible households are unaware of these options, and community housing providers face barriers to scaling up their capacity.
“We already support community housing providers up and down New Zealand, but this report shows there are many areas that we, and the banking sector more widely, can improve,” McGrath said.
Advantages of shared ownership
McGrath emphasised the financial and social benefits of homeownership, including greater stability, stronger communities, and the opportunity to build intergenerational wealth.
“These benefits are being eroded as homeownership becomes less attainable,” she said.
Recommendations for scaling up
The report made four key recommendations to scale up the shared homeownership sector:
- Mindset: Encourage more aspiring homeowners to consider innovative ways of owning a home, such as shared ownership.
- Funding and risk settings: Establish more reasonably priced funding streams to help the sector expand, involving a mix of funding from various sources.
- Certainty: The government could provide greater stability for the sector through a long-term national affordable housing strategy.
- Simplicity and standardisation: Simplify and standardise structures and documentation for financing and development.
Westpac’s ongoing efforts
Westpac has financed around 550 shared equity or leasehold purchases since the start of 2022 and is announcing new initiatives to support affordable housing:
- A $1 billion affordable housing lending target over the next three years.
- Further integration of key information about shared homeownership pathways into financial capability programs.
- Partnering with community housing providers to share standardised funding structures and legal agreements.
- Continuing to partner with Iwi Māori organizations to fund, build, and provide homes on whenua Māori.
“While housing affordability is an ongoing challenge, we’re working hard to give people the tools they need to work towards buying their own home and the hope and confidence they can get there,” McGrath said.
Westpac aims to collaborate with other funders, housing providers, and policymakers to address declining homeownership rates and help more people achieve homeownership.
For more information, visit the Westpac NZ website.
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