Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Mortgage market failing home buyers

Media release 24 October 2013:
Mortgage market failing home buyers

Speaking at the annual general meeting of Community Housing Aotearoa, David Cole of the Queenstown Lakes Community Housing Trust (QLCHT) made an impassioned argument that the mortgage market is continuing to fail the next generation of prospective home buyers.

After listing a myriad of factors that expose home buyers to unfavourable conditions, Cole made a strong case for Starter Loans or Housing Bonds as an alternative to the current structural problems and obstacles adversely affecting new home buyers.

In 2011 the QLCHT began piloting its own Starter Loan scheme through a wholly-owned subsidiary, Queenstown Housing Bonds Ltd, with funding of $6 million provided by Central Lakes Trust.

Findings of the two-year pilot will be presented to the Central Lakes Trust next month, with all indications being that it has been a resounding success - to the extent that it could be considered as a commercially viable model to be rolled out more widely.

Unlike the preponderance of variable mortgages on the market, the scheme protects first-home buyers by securing them access to affordable mortgage rates that remain locked in for five years, delivering certainty to household budgets and restoring confidence to buyers with no penalties if homeowners wanted to exit early.

At the end of five years home buyers in the scheme should have paid back 10 per cent of the principal on their loan to the Central Lakes Trust and could then convert to a pre-approved market rate mortgage with SBS Bank. The bond and security are underwritten by the Queenstown Lakes District Council, although Cole remained hopeful that the Government could see the merits of such a scheme and support its expansion with a Government guarantee.

“Our next generation deserve a much better deal,” said Cole, who then outlined the way that funding for an expansion could easily be sourced if just 5% was set aside from the pool of $48 billion held across Community Trusts, ACC and NZ Super funds.

“As a back of the envelope scenario that would see $2.4 billion become available. If that was allocated in $330,000 lots that could result in more than 7000 Home Starter Loans”.

Cole said that an expansion of a Starter Loans scheme could influence better outcomes for New Zealanders and made a suggestion that Community Housing Aotearoa could consider taking a leadership role in sponsoring such an expansion, especially in order to “create dividends for other initiatives and as an opportunity to partner with other stakeholders”.

Cole said there is “scope to be challenging the government on (all of) these issues”, adding that the large sums of GST paid on new houses, potentially amounting to as much as $1 billion a year, was another barrier that the Government could address.

Referring to the high risk created for lenders, but not necessarily banks, in the prevailing mortgage environment he made the point that no one would tolerate an equivalent volatility in the realm of tax. “Imagine the outcry if people met to re-set our income tax every six weeks and the income tax rates were ratcheted up?”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Populism And Labour 2017

For many people on the centre-left, populism is a dirty word, and a shorthand for the politics of bigotry. In this country, it has tended to be equated with the angry legions of New Zealand First. Who knew they were not just a reactionary spasm, but the wave of the future?

Certainly, at the end of this week, the next US President will have won office (at least in part) thanks to his proven ability at (a) scapegoating refugees and migrants (b) wooing neo-Nazis and racial supremacists (c) attacking journalists and judges (d) threatening to jail his opponents (e) urging nuclear proliferation and (e) by promising to restrict women’s rights to control their own fertility.

On the face of that campaign record, there wouldn’t seem to be much in common between Donald Trump and say, Spain’s centre-left populist party, Podemos. Yet arguably, the similarities could be instructive for the Labour/Green partnership here. More>>

 
 

Oxfam: 30% Of NZ Owns Less Wealth Than Our Two Richest Men

The research also reveals that the richest one per cent have 20 per cent of the wealth in New Zealand, while 90 per cent of the population owns less than half of the nation’s wealth. The research forms part of a global report released to coincide with this week’s annual meeting of political and business leaders at the World Economic Forum in Davos, Switzerland. More>>

ALSO:

Hospitals: Resident Doctors Set To Strike Again

Despite discussions between the DHBs and NZRDA over safer hours for resident doctors progressing during the last week, the strike planned for next week appears set to proceed. More>>

ALSO:

Not So Super Fund: More Burning Ethical Questions For Steven Joyce

Greens: Radio New Zealand reported this morning that the New Zealand Superfund has $77 million invested in 47 coal companies that the Norwegian Government’s Pension Fund – the largest sovereign fund in the world – has blacklisted. More>>

Activism: Greenpeace Intercepts World’s Biggest Seismic Oil Ship

Greenpeace crew have made contact with the world’s biggest seismic oil ship after travelling 50 nautical miles on two rigid-hulled inflatables off the coast of Wairarapa... Greenpeace radioed the master of the Amazon Warrior to deliver an open letter of protest signed by over 60,000 New Zealanders. More>>

ALSO:

Gordon Campbell: Why Tax Cuts In 2017 Would Be A (Proven) Bad Idea

Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves ... More>>

Liquor Sponsorship: Researchers Call For Ban On Alcohol Sponsorship Of Sport

“Due to alcohol sponsorship of sport, New Zealanders, including children, were exposed to up to 200 ads per hour they watched televised sport, and people watching football and tennis saw alcohol ads for almost half of each game,” says Associate Professor Signal. More>>

ALSO:

Mt Albert: Ardern For Labour, Genter For Greens

At the close of nominations, Jacinda Ardern was the sole nomination received for the position of Labour’s candidate for the Mt Albert by-election, says Labour General Secretary, Andrew Kirton. More>>

ALSO:

Earlier:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news