Something that is effectively leasehold land is not the future of Auckland.

GV27:

Something that is effectively leasehold land is not the future of Auckland.

networkn:

 

WTAF!?

 

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051840

 

Are they serious? 

 

People who can't afford a house, aren't likely to be doing so because they can't afford the interest on a small portion, and if they are, the margins for error on a budget this tight are likely to see the Government eat it on mortgagee sales! 

 

The ONLY way I'd even consider supporting this decision, is IF they stipulated it was for new builds instead of existing properties. No chance of that though, it's too much common sense. 

 

Since they won't be charging interest, it would seem that the Government has decided the taxpayer doesn't require a return on yet another large chunk of money. 

 

They are talking about the scheme saving new home buyers abut $100 per week.  Most people could probably do that themselves by reducing expenditure.

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

People living in those circumstances can't buy a house under any scheme that is currently available or proposed.

Based on the herald article, the shared equity scheme would only help people who are $100 or less short of the income required to buy a first home.  That is people with a reasonable household income, almost enough to be able to buy a home.  Most people with reasonable household incomes could save $100 a week out of their discretionary expenditure. 

TL:DR - the people a shared equity scheme would help are nearly there already and could probably tighten their belts to be able to afford a house.

MikeAqua:

 

TL:DR - the people a shared equity scheme would help are nearly there already and could probably tighten their belts to be able to afford a house.

 

And thereby stimulating the market, causing prices to rise further.

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

I literally not only *knew* you'd post that comment, but I could've have written it for you. 

Someone with less than $100 margin for error in their budget will never nor should they ever even be *considering* buying a house. The government shouldn't even be considering helping them do so, because they are making the issue so much worse. 

Buying a house is expensive, but OWNING a house, as you should well know, is very expensive too. The first 5-10 years of house ownership should be relatively maintenance cost free, but there are still all sorts of additional expenses over renting that could

cost well into $100 a week on average. Our house is 12 years old and needs a 20K paint job. We spent 5K sorting paving that after only 6 years had issues that needed major corrective work. Our neighhour watched our house and accidentially knocked a tap on in the garden trying to be nice, water leaked for 4 days, cost us $440 in extra water costs in a month. All sorts of things. households who can't afford it, will neglect it, out of necessity, but this has major impact on value later. 

This is yet another knee-jerk shoot from the hpi and poorly thought out policy by the Labour Government. I know it's not law yet and it may never come to be, but without a LOT of work that policy would be a tax payer burden for little to no benefit. 

gzt:

GV27:

 

Something that is effectively leasehold land is not the future of Auckland.

 

Shared equity is not leasehold.

Sorry, my fault for not including the post about the land value being the shared equity component. 

It would be interesting to see who gets first priority over the assets in debt recovery. Our bank is our first one, it was entirely non-negotiable. If the Crown doesn't get this, then they potentially could lose millions in a property values crash or market crash that causes mortgagee sales like we saw a few years back. 

All without consequence to the borrower. If they became the second debenture holder, then they would only be paid back if the proceeds of the forced sale of the property exceeded the loan amount. 

networkn:

 

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

 

I literally not only *knew* you'd post that comment, but I could've have written it for you. 

 

Someone with less than $100 margin for error in their budget will never nor should they ever even be *considering* buying a house. The government shouldn't even be considering helping them do so, because they are making the issue so much worse. 

 

Buying a house is expensive, but OWNING a house, as you should well know, is very expensive too. The first 5-10 years of house ownership should be relatively maintenance cost free, but there are still all sorts of additional expenses over renting that could

 

cost well into $100 a week on average. Our house is 12 years old and needs a 20K paint job. We spent 5K sorting paving that after only 6 years had issues that needed major corrective work. Our neighhour watched our house and accidentially knocked a tap on in the garden trying to be nice, water leaked for 4 days, cost us $440 in extra water costs in a month. All sorts of things. households who can't afford it, will neglect it, out of necessity, but this has major impact on value later. 

 

This is yet another knee-jerk shoot from the hpi and poorly thought out policy by the Labour Government. I know it's not law yet and it may never come to be, but without a LOT of work that policy would be a tax payer burden for little to no benefit. 

 

 

 

 

 

If only it were just those who are trying to buy a home. What about those who already have homes and their circumstances have changed EG redundancy and they have been forced to take much less income, they cannot afford the mortgage and have less than $100 pw "spare" money. They cannot sell as they cannot afford rental even if they could find suitable rental. And of course there are those who cannot buy and cannot rent. 

networkn:

 

It would be interesting to see who gets first priority over the assets in debt recovery. Our bank is our first one, it was entirely non-negotiable. If the Crown doesn't get this, then they potentially could lose millions in a property values crash or market crash that causes mortgagee sales like we saw a few years back. 

 

All without consequence to the borrower. If they became the second debenture holder, then they would only be paid back if the proceeds of the forced sale of the property exceeded the loan amount. 

 

 

 

 

 

Usually a statutory charge against a property gets first priority. EG suspensory loans for house modifications for disabled.

MikeB4:

 

If only it were just those who are trying to buy a home. What about those who already have homes and their circumstances have changed EG redundancy and they have been forced to take much less income, they cannot afford the mortgage and have less than $100 pw "spare" money. They cannot sell as they cannot afford rental even if they could find suitable rental. And of course there are those who cannot buy and cannot rent. 

 

This plan would not help those in that situation.

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

rjt123:

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

Politically incorrect to mention this, but for those people it would be interesting to know how many smoke, drink or do drugs?

There would be a portion who genuinely are struggling to exist, and then there'll be a significant number (not necessarily a majority) who are vicitms of their own choices.

Oh God, you just lit a fuse!

rjt123:

MikeB4: For a large percentage of the population it's a luxury they cannot do. To save $100 if it is even possible would be to reduce food a heating expenditure which is already at a minimum.

Politically incorrect to mention this, but for those people it would be interesting to know how many smoke, drink or do drugs?

There would be a portion who genuinely are struggling to exist, and then there'll be a significant number (not necessarily a majority) who are vicitms of their own choices.

Drug and alcohol abuse is present in all sectors of society.