Dreams of securing a first home are becoming a reality for some people in parts of Wanaka and Queenstown Lakes who, up until now, have been locked out of the booming market.
Thanks to the Queenstown Lakes Community Housing Trust, a Secure Home programme is getting more and more people on to the property ladder where affordability is, otherwise, near impossible.
The question is can Central Otago follow suit?
The initiative was discussed among Central Otago District councillors earlier this month, in the hope a similar approach could be adopted for wider Central Otago.
The programme is based on a leasehold agreement between the housing trust and the household.
Queenstown Lakes Community Housing Trust executive officer Julie Scott said essentially, the trust retained full ownership of the property and the household purchased the right to occupy that property at the cost of house construction (excluding land).
The household then paid an annual ground rent to the trust for use of the land, which was set well below market value and only increased annually with inflation for the period the household remained in the programme.
She said the initiative would ensure the initial purchase price (upfront payment) and ongoing ground rent remained affordable for the household in perpetuity.
“The core of the Secure Home programme is that it provides long-term security of tenure with the 100-year lease, and affordability through the household essentially only buying the home and then paying a below-market ground rent on the land.”
She said the household did not have the ability to make large capital gains, but affordability and security of tenure were guaranteed.
“For most households it’s cheaper than renting, and they pay off their own mortgage rather than a landlord’s.
“It gives them security and affordability.”
If the household wanted to sell, they would have to sell it back to the trust.
The trust has a waiting list of 670 households Queenstown.
The waiting list includes those seeking affordable rentals and the trust’s rent-to-buy programme.
Ms Scott said six new homes were nearing completion at Hikuwai, Wanaka, which are on land received from the developer through the inclusionary zoning process.
Of those, four will go into the Secure Home programme and two will be retained as long-term affordable rentals.
She said work was due to start on 13 new homes in Lake Hayes Estate on land received from a developer Secure Home programme and four as rentals.
Ms Scott believed the initiative was a New Zealand first, which was modelled on a similar concept in Whistler, Canada.
The Secure Home programme, launched in 2019, was discussed among Central Otago district councillors last month when they heard the overheated housing market had shut professionals such as police, teachers and nurses out of rentals, and the property ladder.
A report by council chief adviser Saskia Righarts said there had been an overall 49% increase in house prices in Central Otago to the year ended September to an average sale price of $560,116, including the lockdown period.
However, more recent data showed an increase to $605,000 14.2% over the past year.
Average rents had increased 1.24% to $407 per week for the year ending September, including the period of Government introduced rental freezes as a result of Covid-19 and banks offering mortgage holidays, but more recent data showed a jump of 9% to $490 per week, Ms Righarts said.
Ms Scott attended the meeting as guest speaker and said the trust had helped people, including key workers, such as teachers police and nurses into housing.
In 14 years the trust had helped 177 households into accommodation across developments in the Queenstown Lakes district and had amassed $27million in net assets.