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An Australian company is suggesting co-ownership as a way to help solve New Zealand's housing affordability crisis.
In a submission made to Parliament's commerce select committee yesterday, Pod Property's founder and director Jeremy Levitt offered co-ownership as a way of getting more people out of rental properties and into their own homes.
"Co-ownership is a cheap and effective way for the Government to address the housing affordability crisis," Mr Levitt said.
Co-ownership allows people to purchase property as a group, giving those who could not afford to service a loan independently the chance to pool resources.
Pod Property began in Australia in February 2006 and is expanding into New Zealand. It was designed to offer "all-in-one home ownership solution", Mr Levitt said.
For $250 a person, it arranges a co-ownership agreement to ensure all parties are protected throughout the process of buying a home, and further down the track in case of default payments or sale of the property .
Co-ownership had helped thousands of Australians into their own homes and could do the same in New Zealand, Mr Levitt said.
He urged the committee to consider educating New Zealanders about co-ownership and encouraging them to enter into co-ownership agreements.
He was questioned by MPs on the committee over what had happened in Australia when its Government introduced a grant to help first-home buyers.
The Australian Government introduced a grant of A$7000 ($8164) for first-time home buyers in 2001.
The year following the introduction of the grant saw the median house price in Australia rise $32,000.
Vendors took advantage of the cash injection into the pockets of buyers, Mr Levitt said.
This year, the New Zealand Government introduced a grant of $1000 for first-time home buyers as part of the KiwiSaver scheme.
Those opting into a common tenancy agreement included friends, families and defacto couples, Mr Levitt said.
He singled out the "commitment phobic" generation Y, saying that co-ownership encouraged them to get into the property market even if they chose to delay marriage.
- NZPA
