New Zealand Housing Crisis and the Perfect Solution of Shared Ownership.

(Newswire.net — July 27, 2014) Adelaide, SOUTH AUSTRALIA — The New Zealand housing crisis is not improving and it is not going away. Continuing to remain a hot topic for political debate, New Zealanders need a real solution to this problem, and they need it fast. With house prices doubling in the past decade, the percentage of New Zealanders who own their own home has dropped significantly. According to Jason Keiller, an experienced real estate industry specialist, the perfect solution for his country’s housing crisis is a shared ownership scheme.

Shared ownership allows people to part-own, part-rent their home. A scheme perfectly designed to allow those who can’t afford to buy a house outright get onto the property ladder, shared ownership lets people buy a percentage stake of their home, with the percentage being based on how much they can afford.

In shared ownership, buyers get a mortgage for a percentage of the property price that they can afford, usually anywhere between 25 percent and 75 percent, and then they pay rent on the remaining portion. Shared ownership schemes may be government-backed or privately operated schemes and rent is paid to the government or private housing association backing the scheme.

The New Zealand housing market statistics are certainly eye-opening. According to the New Zealand National Business Review, New Zealand has the third highest overvalued property market in the world, behind Canada and Belgium. Interestingly, the Wall Street Journal studied these statistics and found that Canada is very open to foreign investors, while Japan, the least over-valued country, is the most closed to foreign investment. The median house price is NZ$415,000 according to the Real Estate Institute of New Zealand (REINZ), with Auckland’s average house price sitting at a whopping NZ$592,00 and Wellingtons average house price at over NZ$418,000. Home ownership rates have fallen to their lowest in 50 years, with just 65 percent of Kiwis owning their own homes, a drop of 10 percent since the 1990s.

Jason Keiller has been involved in real estate and investment all over the world and believes that New Zealanders deserve better. “Born and raised in Auckland, I find it quite sad that many everyday Kiwis can’t afford to buy a home or even afford to live in Auckland now,” Jason said. “Many people I meet say that they feel they have no other option than to head across the ditch to Australia, where higher pay, more affordable housing and lower cost of living offer a better lifestyle.”

“Shared ownership schemes are popular and very successful in the United Kingdom, particularly London,” said Jason Keiller. “I have worked with many people, younger, older, long-term renters, and first home buyers get onto the London property ladder without a high income and without a large deposit. Something that would never have been possible without a scheme like this.”

Jason believes that shared ownership is the only effective solution to the country’s housing crisis. Jason spent several years in the United Kingdom building his own real estate company, working closely with several of the U.K’s top housing developers as well as being involved with a number of the private shared ownership schemes. To ensure the scheme works effectively, it should be offered to those who meet certain criteria, including household income thresholds and those who do not own property, with special priority given for essential services workers, like teachers, nurses, ambulance staff and police.

The government is trying to look at ways to alleviate this crisis, seemingly with little result. The Reserve Bank continues to consider interest rate increases, there is talk of revising foreign investment criteria and some talk of first home buyer incentives has been mentioned.

Increasing interest rates will likely have serious consequences on the economy and housing market. Interest rates have been at record lows for the past five years and, with almost half of the mortgages on floating rates, this will only hit the pockets of those already on the property ladder, those who have had to stretch their buying budget to the limit to afford to buy. This is what America has just experienced over the past few years, with a huge burst of their property bubble. New Zealand embraces foreign investment as a form of income, therefore any significant changes to limiting foreign investment is highly unlikely. First home buyer incentives would need to be significant for this buyer group to get onto the property ladder, something the government simply cannot afford to offer.

For further information, please contact Jason Keiller at jason@newsworthyvideo.com