As of tomorrow Labour’s Shared Equity pilot will end and the Government has made it clear they will not be providing any funding for it to continue. This is despite Phil Heatley promising before the election that they would keep it at least until their Gateway scheme becomes available. The Gateway scheme has been missing in action since the election (and received no funding in the Budget) although we’re promised that some sections will be made available “soon”.
There is no doubt that the uptake of shared equity during the pilot was low. I’m not questioning that at all. But when Housing New Zealand was asked why this was, Senior Communications Adviser Michelle Williams revealed that Housing New Zealand was told to stop promoting the scheme after the 2008 election. Heatley confirmed this in the House today saying he didnt want to waste money on “advertising”.
The shared equity pilot started in July 2008. This means for twenty of the twenty-four months that the pilot was operating it wasn’t being promoted. Heatley says he just wanted to save money, but why waste money carrying out a pilot, at the end of which you have no idea whether the low uptake is due to it not working, the recession, or simply the fact that no one knows it exists.
Housing New Zealand are quite clear on why the uptake was so low saying that “Initial forecasting for this product suggested funding would be required for approximately 700 loans over the two-year pilot phase. This has not been the case due to a change of government and subsequently change in focus. Coupled with no promotion and low awareness of product, demand has been very low.”
So not because it doesn’t work. Not because it has no potential in the future. Because people don’t know it exists. What a waste of time and money.
NACT are short term thinkers.
Proven over and over and over and over again.
This was potentially a really good scheme, one Labour should definitely re-introduce in it’s next term…
There were problems in theory with the scheme though because it would cause house price inflation if it had widespread uptake, encouraging prices to go up because people would be able to afford to offer more for property. I never got into the detail enough to know whether that point was ever addressed, but after the rampant house price bubble in NZ over the last few years, in theory anyway, it was a good point. Was there something in the scheme to stop that effect?
You make a valid point but 700 low income people into their “own” homes isn’t what I’d call widespread…
Add a few more overs from me Loota.
When you look at the programmes started by Labour that this government has either cut back or wiped altogether, you will find they are all about giving a hand-up of some kind, or needed assistance to those whose incomes are at the lower end of the scale. These are people who traditionally vote Labour and therefore are seen by National as unimportant and expendable. What disgusts me is their pretence at caring – witness the cynical befriending of the young girl from Mt Roskill whom Key took to Waitangi in 2009 – when they don’t really give a damm about anyone other than their own kind.
This is one frustrating thing to me about Labour. Urgency. Not enough urgency on some really good ideas. Yes I understand good planning takes time, yes true consultation takes time, but weight against that the fact when people see your ideas in action and working in practice they are much more likely to vote for you.
lol Anne. Hi
yes that’s true Jeremy and Anne. It would address the point I raised if not very many people, just a few who needed a hand up, used it. And yes they would be Labour voters.
This scheme was a great headliner at the time, but was only tokenism. Why could not Lab at the time review the property market and investigate where they could use available tools to assist in not having a boom bust cycle, and allow housing to be of great affordability. So Lab have set ut a policy to throw money to a priviledged few but were willing not to tackle property speculation, tax benefits for land lords (and Lab still maintain the need for depreciation on rentals, and ability to have high debt levels on rentals and many others) eliminate the tax subsidies and limit the level of debt servicing ability to claim, and there are other measures to assist in lowing the cost of property ownership then the need to assist a few into housing will be greatly reduced. Attack the cause not the symptoms.
@Loota that was a claim that got National a lot of traction – that Labour was all about endless reports rather than action…
I’d rather have endless reports, than mining in National’s parks, three strike laws and Roads of National Party Significance, to name a few, in retrospect…
You’re looking at two very different scales of problem here: micro – helping out a few hundered home owners – and macro, moving the direction of the whole housing market. Best not to mix up solutions appropriate for one scale, with another.
Loota what happens when the micro solution perpetuates the macro issue?
If house costs had remained at around 4 times avg income levels the issue of house affordability whould not be the issue that it is, also the cost of renting would be less.
Pollys are very good ar micro solutions that just compound the real issue
the only macro way to take the heat out of the housing market is to supply more houses, both state and private, but that does not mean there’s no room for micro initiatives like shared equity (by their nature, such schemes are only going to be suitable for a small number of people)
More expensive credit and greater investment in the sharemarket could both take heat out of the property market…
Kiwi’s are simply out bidding each other for property, the yields show an overvaluing of at least 10% – 15% in my veiw…
Phil who ?
I think you guys need to put some more heat on Phil
You’re looking at two very different scales of problem here: micro – helping out a few hundered home owners – and macro, moving the direction of the whole housing market. Best not to mix up solutions appropriate for one scale, with another.
I disagree. Shared equity schemes bring more buyers into the market without doing anything about the supply of housing. Prices go up.
The help you give to a handful of new buyers is offset by all those other thousands of buyers who will have to pay higher prices.
Yhe long-run outcome is a transfer of wealth toward people who already have houses and want to sell them.
You’re welcome to disagree, but a few hundred owners represents an insignificant demand compared to the 60,000 to 70,000 houses sold a year in NZ.
Interesting, is national axing it and not promoting it because no one is taking it up or because it’s a bad idea. Many here have addressed the quality of the idea. How different is “Gateway”?
So if Labour is re-elected next year, will you reintroduce the Shared Equity pilot?
I will vote Labour if they bring back the shared equity scheme. It is my only chance of ever owning a house in Auckland. I am on an above average wage $55000 + Company car, but cannot afford a below average unit. My only option is move to Australia I will earn $75000 AUD in my occupation and the AU govt gives a $7000 grant for first home buyers. NZ is a sad country to live unless your a rich immigrant or baby boomer home owner/landlord. FU