Financially struggling Kiwis may be offered half shares in a property by the Government, under a scheme aimed at combating the country's plunging home ownership rates.
Housing Minister Steve Maharey has told The Press that Labour is likely to introduce a 'shared equity' scheme, where the Government subsidised those who were struggling to buy their own home by becoming part-owners in property.
He said some kind of scheme where the Government rewarded people who had saved had been 'quite loudly' hinted at for inclusion in this year's Budget.
'We want to see more home ownership,' Maharey said. 'Shared equity is something we have considered and are looking at implementing.'
Yesterday, the Salvation Army released the results of a major report into home ownership in New Zealand.
The report, From Housing to Homes, highlights a growing home ownership crisis, with average Kiwis increasingly unable to escape the rent trap by buying their own properties.
Home ownership has dropped from a peak of 73.8 per cent in 1991 to 67.8 per cent.
'New Zealand's home ownership is a problem, both economically and socially, but there are options available that can reverse this trend and make home ownership a reality for many low and modest income households who are currently priced out of the market,' said Salvation Army social policy director Major Campbell Roberts.
'Promoting and assisting people into home ownership used to be an important part of Government housing policy.
'It needs to become so again.'
Individuals who earned less than $50,000 and couples or families earning below $70,000 are classed in the report as 'low and modest income earners'.
'It's pretty difficult for those people to get the deposit together for a house as property prices just keep on rising and rising,' Roberts said.
The Salvation Army report suggests four options to alleviate the problem:
Shared equity. The cost of a property would be shared between two parties, for example, the homeowner and either the Government, local council, non-profit organisations or a private investor.
Right-to-buy. State housing tenants would get the chance to buy their homes.
Supported saving. Prospective homeowners' savings would be matched by the Government and locked in for the purpose of building a home deposit.
Land lease for key workers. The Government would lease land in expensive areas to people in 'key' professions such as nurses, police or teachers to help fill skills shortages.
Housing policy expert and senior Auckland University planning lecturer Tricia Austin said home ownership was important because it provided stability, which was healthy for families and encouraged them to be contributing members of society,
Austin and other independent housing policy experts yesterday said New Zealand needed more than one option to help get middle-class families and individuals out of the rental trap, but agreed shared equity was the best option for both the short and long term.
'Shared equity is a very good option because it gives people the security of being in their own home but without the full costs,' Austin said.
Shared equity allowed Kiwis to own part of a home and gave them a sense of security without depleting the stock of State homes which do not meet current demands.
Steve Maharey said specific plans for Government to combat the problem of declining home ownership would be outlined when the housing strategy was rolled out in April.
Maharey estimated less than 10,000 households – or those at the bottom of the socio-economic scale – would be affected by any Government initiative. 'There is a very significant need out there but we need to cut the cloth to suit our budget,' he said.
Last year, the Government produced a draft Housing Strategy document to outline the country's housing problems as home ownership became more and more out of reach for most New Zealanders.
It also identified an increasing problem with poverty with families struggling to pay higher private rents and becoming unable to save a deposit in a rising property market.
New Zealand's downward trend in home ownership matched the situation overseas where governments had been forced to adopt more innovative approaches.
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