Govt plans to help Queenstown home buyers

[muppet]

Govt plans to help Queenstown home buyers
By DAVID WILLIAMS - The Press | Saturday, 7 July 2007

A lucky few first-home buyers in Queenstown will get a helping hand from the Government, worth $2 million, to stop the resort turning into a "rich ghetto".

The Queenstown Lakes District is one of the least affordable areas in New Zealand to buy property, with a median house price of $529,500. The national average is $349,000, with Christchurch sitting at $335,000.

Announced by Housing Minister Chris Carter in Queenstown yesterday, the scheme, run by the Queenstown Lakes Community Housing Trust and Housing New Zealand Corporation, will help 35 home buyers by taking a passive interest in their house of up to 40 per cent.

Applicants, either individuals or a couple, have to earn more than $80,000 a year and have the option of eventually buying out the trust. Registrations open in September.

Carter said less affordable housing was one of the perils of prosperity and the scheme would help solve a home ownership crisis in the area.

"There's a real danger that Queenstown could turn into a rich ghetto. Real families of workers or middle-income earners can't afford to live here."

The Government's $2m will be matched by $2m in land grants and cash from developers in deals negotiated by the Queenstown Lakes District Council and passed on to the housing trust.

Trust chairman David Cole said it was only fair that developers of large-scale projects, which require special council zoning, contribute to the scheme.

"They're contributing to the problem (of less affordable housing) in terms of growth and bringing the tradespeople and other workers here to build their developments."

A home affordability study for the Wakatipu area released by Queenstown company MAC Property on Thursday concluded a home buyer needed to spend almost double the amount of a person who rents.

To illustrate the inaccessibility of affordable housing in the area, the study found that a person on the Queenstown Lakes average annual income of $63,800 (or $1227 weekly) would spend $916 a week servicing a two-year, interest-only mortgage on a $529,5000 house at a 9 per cent interest rate.

Using a 25 per cent tax rate, or $307 a week, that would leave the home owner with just $4 a week for living expenses.

MAC Property's Doug Reid said Queenstown was not a great place for the first-home buyer. He expressed reservations about the scheme's effects.

"You still get the chance of creating more demand on top of what is already good demand."

http://www.stuff.co.nz/4118931a11.html

[mlkmnz]

Anyone know why the focus on Queenstown? Surely if home ownership is deemed an issue to the government, surely they'd be better concentrating on the main centres where large portions of the local population are having the exact same issues buying homes instead of in a tourist mecca?

[Riviera]

I'd say the reason for Queenstown would be a better return on investment for the government. ie, let's put out the property fire out with petrol. Anyone know of any cheap house and land packages going down their.

[spurner]

I think the reason they chose Queenstown is to use it as a trial, as it's a small area with high house prices, and if it proves successful to expand it to other parts of the country.

Personally I think it's going to have the opposite effect to that intended. The government is giving more people more money to buy more houses, and this is supposed to alleviate affordability....

[mlkmnz]

I think the reason they chose Queenstown is to use it as a trial, as it's a small area with high house prices, and if it proves successful to expand it to other parts of the country.

Point. I just wasnt aware there was a mass of Queenstown locals who had issues owning homes. At least this will help Sam Neil get a decent place of his own

[Realtorman]

Announced by Housing Minister Chris Carter in Queenstown yesterday, the scheme, run by the Queenstown Lakes Community Housing Trust and Housing New Zealand Corporation, will help 35 home buyers by taking a passive interest in their house of up to 40 per cent.



Just imagine the army of bureaucrats needed to administer this scheme. By taking a 40% interest in someones home I wonder if they will get a 40% share of the proceeds on sale. Who will pay for the repairs, rates,insurance etc. Will it be apportioned.
This will make the homes 40% cheaper. Yeah Right The market will just factor this in and the homes will become even more expensive.
The old rule will apply here. Whatever the bureaucrats plan to achieve the opposite will happen.

[muppet]

No wonder the price of property has gone up with a bump in Wellington.
It's all those extra public servants required to run the scheme.