More Māori across Aotearoa will benefit from home ownership opportunities, thanks to an expanded funding framework that enables lending for housing on Māori freehold land.
Under the expanded model, whānau who meet BNZ’s standard home lending criteria can secure a home loan for housing on Māori land managed by land trusts or incorporations.
The new Ngati Whatua Orakei property development located in Belmont, on Auckland's North Shore. Photo / Dean Purcell
This is an extension to Bank of New Zealand’s innovative funding model, initially developed in collaboration with Ngāti Whātua Ōrākei, to support more Māori to achieve home ownership on their whenua (land).
Whetu Rangi, BNZ head of Māori business, says the initiative is a step forward in addressing the unique challenges Māori face when seeking finance to build homes on their whenua.
“It’s about more than just providing loans; it’s about empowering our people to create sustainable, thriving communities on their whenua.”
About Māori land trusts and incorporations
Māori land trusts and incorporations play a crucial role in the management of Māori freehold land, which covers about 1.4 million hectares - about 5% of New Zealand’s land area. This differs from iwi-owned land, which is typically held by an iwi post settlement entity as a result of Treaty of Waitangi settlements.
Whetu Rangi from BNZ.
A significant portion of Māori freehold land is held in trusts and incorporations, which manage the land on behalf of multiple owners. These owners are generally connected through whakapapa (genealogy) and can number in the hundreds or even thousands for a single land block.
The collective ownership structure of Māori land has historically posed challenges for lending. This, combined with restrictions on land transferability, including those in Te Ture Whenua Māori Act 1993, has created barriers to using Māori land as security for loans. As a result, whānau have faced significant obstacles in obtaining individual home loans on collectively owned land, impeding housing development on ancestral lands for generations.
Overcoming barriers to lending
To address this, the BNZ framework uses leasehold mortgage lending practices that align with Māori land ownership legislation and enshrines agreements that ensure property is controlled by the Māori land trust, incorporations and owners, which would take over in the event of a distressed mortgage.
This approach balances the bank’s security requirements with the land rights of shareholders and beneficiaries of Māori land.
Rangi said financing a build on Māori land owned by a trust or incorporation is specific to the circumstances of each project, considering factors such as the land’s characteristics, available supporting infrastructure like power, water and roads, and number of landowners.
He said it’s important to understand that every case is unique. While BNZ has developed a model that can work in a broad range of situations, the specifics of each piece of land, surrounding infrastructure, and trust structure, will influence the complexity and viability of each project.
“Given the nature of many Māori land blocks across New Zealand, which often have limited infrastructure, can be in rural or remote areas, and often have many owners, we anticipate that larger developments by land-owning entities will be more common, though individual whānau projects will also be possible.
“For interested whānau, trusts and incorporations, we encourage you to visit our website and reach out to our Māori business team via our website to discuss your specific situation and how this initiative might apply.”
