The house prices start at $496,000, but there’s another buyer in the mix in a Te Awamutu development.
Bridge Housing Charitable Trust is offering an 80-20 shared equity scheme with the aim of getting more people into home ownership.
“What it means is that the family can go in at a lower purchase price,” manager Jennifer Palmer said.
“It just means that they can get in earlier with a lower deposit, they have lower mortgage repayments and then over time they’re building their equity in the home and then they’ll get to a point where they can refinance and can buy out their partner.”
There are 16 homes available for shared equity purchases – all two-bedroom townhouses on Ohaupo Rd, Te Awamutu.
They each cost from $496,000 and, under the First Home Partner programme, the trust would own a 20% stake.
Bridge Housing Charitable Trust is part of Brian Perry Charitable Trust.
It bought 20 homes in the same complex to sell as leasehold – similar to the Peak Mews project in Cambridge – under the Secure Homes Programme earlier this year and sold 19.
Another 16 in the development haven’t yet sold, opening up the shared equity option.
The trust also plans to offer this on some homes in a $20 million 42-apartment affordable housing scheme planned for Hamilton’s CBD.
Palmer said shared equity was about affordability, not social housing, and called the 20% equity an “interest-free loan”.
If the purchaser decides to put down a 5% deposit, they take on a mortgage on 75% of the house price.
“And that makes it much easier for them to get, particularly when interest rates are still a bit high.”
The household income cap for the programme is $130,000.
Palmer said it was a pathway to homeownership and in its absence many households would be compelled to rent forever.
“For us, it’s all about getting families into houses.
“It’s harder for everybody right now, certainly harder for first home buyers.”
She had seen commercial developers coming up with similar programmes to get the stock moving, but warned purchasers to be careful of terms and conditions.
The 16 houses had been on the market since May this year but did not sell.
Bridge Housing Trust currently offers two programmes, and Palmer said a third, Rent to Buy, had been on the radar for some time.
Resource permitting, the trust will launch it, she said.
“All of this requires a lot of capital and we’ve had a lot of donations from the primary trust, but there will come a time when we’re looking for others to donate.”
Palmer said Cambridge and Te Awamutu were the two growth corridors and, while there were developments, these programmes helped essential workers in particular to buy their first home.
“Nurses, teachers, police and people who are earning decent incomes but still just can’t get on the property ladder.
“So we’re really mindful of that cohort that we’d like to cater to.”
Article extracted from the Waikato Times, published on November 4, 2024