Is realising the dream of getting on the property ladder despite being on a low income, being single or battling the cost of living still possible in New Zealand? Carmen Hall talks to Kiwis who have defied the odds and how the Government and other organisations are lending a
How savvy Kiwis are getting on to the property ladder and who is helping them
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They heard about the Doing Good Foundation through a friend and had applied before without success until a phone call in 2019 led to them moving into their own home three years ago.
Ana said she “cried” and the opportunity was “amazing and life-changing”.
Manu said they worked with an “awesome” budget adviser to clear their debt and they moved into their four-bedroom home on an 800sq m section just before lockdown in 2020.
They paid about $618,000 for their home.
They had been looking at moving to Australia, but Ana convinced Manu to give the Doing Good Foundation one more try.
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The construction worker said he felt as if the stress of renting had been lifted off his shoulders.
Ana said it felt wonderful to be able to give her children the “warmth and security” that comes with home ownership.
“We are all so happy.”
Demand for homes outstrips supply
Doing Good Foundation general manager Malcolm Hardy said it had helped about 95 families move into their own homes over the past 30 years.
Families rent their homes until they have enough saved for a deposit. They are then connected with Kiwibank to apply for a mortgage at the price of their rent.
Hardy said demand for homes outstripped supply.
“At present, we have 50 people who have made applications in 2023. At present, we have a gap between buying land, developing it and actually building the houses so we may only have four houses in 2024, but our aim is to complete 8 to 10 homes a year.”
Funding was an “ongoing battle” but in the past TECT and Bay Trust had helped, and the organisation had managed to get some interest-free loans from the Primary Health Organisation for 15 years.
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Hardy said many people could not get enough of a deposit to get a mortgage to buy a house.
“This feeling of despair and hopelessness is huge for people and the looks on their faces when they do move into their own house is priceless. It totally changes their lives.”
Young couple will be mortgage-free in six years
Tauranga couple Molly Sprague and William Martin, 20 and 21 respectively, believe their youth counted against them in their dream to be homeowners.
Buying a tiny home did not work in their favour either because the couple could not access their KiwiSaver.
Through sheer “determination and commitment”, Sprague said, they managed to save $30,000 for a deposit.
She is a law student and Martin is a welder.
However, Sprague said, it was not easy finding a loan.
“Our parents had to go guarantors for each of our halves.”
The pair paid $138,000 for their two-bedroom, 42.5sq m tiny home not including additional expenses for delivery and Hiab services that exceeded $9000.
Sprague said they were fortunate because they placed the tiny home on her parents’ 3.2ha section.
She has done the maths and believes they could be freehold in six years. The weekly repayments are $460 and Sprague said the tiny home was not only “a stepping stone into the property market but a strategic pathway into it”.
“Once paid off, we can sell the unit which will contribute towards a deposit for a traditional home. Otherwise, we have the option of transporting it to a piece of land in the hope of renting it out in the future.
“Essentially, our weekly loan repayments count towards an investment, transforming what could have been ‘dead money’ into an asset.”
This summer, they plan to build a deck to extend space.
Living together in the tiny home was “nonetheless perfect”.
“It’s all we need for the two of us”.
Single and owns her own home
A Rotorua woman says it’s still possible to get on the property ladder if you are single.
Alice, who asked not to use her last name, told NZME she grew up in a rural town before attending university in Auckland. She soon realised her homeownership dream was out of reach in the largest city in New Zealand.
She shifted to Rotorua in 2020 for work and while she was good at sticking with a budget, she struggled to make the numbers work for a mortgage.
She discovered First Home Loan through Kāinga Ora, which allowed her to buy her $355,000 two-bedroom house with a 10 per cent deposit.
“I thought that works for me because I’m young, I’m cash poor, I can keep to a budget but I don’t have any equity behind me.”
She said the milestone was significant because “it’s the only property my entire family owns” and there was no family support available to her to buy it.
Alice said she was still a country girl at heart and was living her best life in Rotorua with chickens, a cat and a flatmate who paid $200 a week.
“I love it. It’s been such an improvement in my life. I used to spend 1.5 hours one way to work, now it’s 15 minutes so that is a huge trade-off. Rotorua is beautiful and has so much to offer, it’s got it all.”
9994 Kiwis buy their own homes in 12 months with Kāinga Ora help
Kāinga Ora – Homes and Communities general manager Nick Maling said that in the 12 months from July last year to June this year, the state housing provider helped 9994 New Zealanders buy their own homes.
Applications had closed due to unprecedented demand for its First Home Partner (FHP) pathway, and its future was up to the Government and new Housing Minister.
As of October 2023, $158 million was committed to property purchases on this scheme with $35.9m to be allocated.
“First Home Partner was set up as a shared ownership scheme to help aspiring first-home buyers whose deposit and home loan weren’t quite enough to buy a home that met their needs.”
It enabled buyers to buy a home with Kāinga Ora that could pay up to $200,000 for its share.
Nationally, 672 households had settled into a new home on FHP including 14 in the Bay of Plenty.
Other schemes included First Home Loans (FHL) where selected banks and other lenders issued loans that were underwritten by Kāinga Ora.
“This allows the lender to provide loans that would otherwise sit outside their lending standards,” Maling said.
Since it was introduced in 2003, it had underwritten 24,638 FHL across the country, for original loan amounts totalling $7.2m.
Two-hundred and seventy-two applications had been granted for the Tenant Ownership grant from December 2015 to October 2023, including 11 in the Bay of Plenty. It was not available in areas where demand was high for state homes, including Auckland, Wellington City, Hamilton and Tauranga.
A maximum of $20,000 was available with some criteria, and the purchase price was determined on market value and a registered valuation.
“Kāinga Ora is delivering a range of programmes and products that provide or facilitate good-quality, public and affordable housing choices to meet the diverse and changing needs of New Zealanders,” Maling said.
“Through our Home Ownership products, we are helping people achieve the security of home ownership.”
Minister of Housing Chris Bishop said all New Zealanders should be able to see a path to home ownership.
“Determining any future funding and extending the First Home Partner Pathway within the Progressive Home Ownership programme is a decision that is yet to be made.”
‘Still pinching themselves’
Kea Smith and Joe Hughes never imagined they could afford a house in Tauranga, but they moved into their brand-new home in October.
The couple, who are in their early 20s, are “still pinching themselves”.
On the day they moved in, Smith, who works for the iwi Ngāi Te Rangi, said it was an emotional day made possible by Habitat for Humanity’s progressive ownership programme.
“I cried. We are so grateful and thankful for the opportunity.”
Hughes said he felt “overwhelmed with joy”.
The exterior plasterer said now his family could move forward.
‘Reach people from all stages of life’
Habitat for Humanity Bay of Plenty central region general manager Nic Greene said its programme was able to “reach people from all stages of life”.
He said it was backing Smith and Hughes to succeed and realise their housing aspirations.
Under the progressive homeownership programme, three of 13 homes have also been built in Rotorua with support from Bay Trust and the Government.
There was a sweat equity contribution required from approved applicants.
“They do education courses, and we [have a] range of programmes around financial literacy, home maintenance and those kinds of things. We recognise engagement in the community, so if they volunteer at a second-hand shop, or coach a football team — anything along those lines.”
The programme was a rent-to-buy model, and families spent their first five years in the home as tenants.
“They pay an affordable market rent. It pays costs and the balance goes towards the deposit, along with any equity gains.”
Greene said demand for housing had increased, but it was limited by access to capital.
“The housing crisis hasn’t gone away, it’s subtly changed. House prices have softened ... but it’s still not accessible to low-income and some middle-income families.
“We need these mechanisms that help people progress into homeownership.”
