Shared equity pilot getting mixed reactions

Go Gecko CEO Geoff Doyle believes it’s a positive step towards turning around the country’s dire housing market.

Doyle says the government’s offer of an interest-free loan on a house of between 5% and 30% of its value, to households with an income of $85,000 or less, will certainly help ease the burden of painfully high interest rates.

Housing Minister Maryan Street says the scheme, which is restricted to regions with the highest house prices (Auckland, Wellington, Nelson, Christchurch and Queenstown), will help 700 households to buy properties.

While Doyle believes $35 million to help 700 families is an excellent starting point, he says much more than that will be needed to improve the current market situation.

Harcourts chief executive Bryan Thompson says it’s a little early to say what impact the scheme will have on the market.

His initial view is that it is unlikely to push prices up in these markets, however it may bring more potential buyers in which would provide a floor underneath prices.

However, Alastair Helm, chief executive of realestate.co.nz, says landlords might take advantage of the scheme.

Street wants to target people who have already saved a deposit, but who can’t afford to buy a house in their area because prices are far above a mortgage they can afford.