Quote Originally Posted by Vagabond47 View Post
Overall this does sound fairly similar to what we have. We don't have shared equity, but we have the rent to buy scheme (not that the details are clear on that)

Rent to buy instead of Shared equity,
5% deposit with govt insured loan, check, with price and income caps, check
Second chancers included, check.
NZ gets the $5k (or $10k for new build) )per person grant as well, again, income and price caps apply.

But the big problem is both of these schemes are just going to spur more demand, which will do what to prices? yeah, more demand = higher prices.
The solution isn't to give people money to help blow the bubble up further, its to increase supply and bring prices down.
Not at all similar to the Cdn model where the gov't provides a loan up to 10% (on a new build; note on existing home it's only 5% so there is the emphasis for developers to build more supply). The loan appreciates (or depreciates in a market collapse) at time of sale or in 25 years if the house has not changed hands. This is not a 'grant' where the funds don't have to be paid back as in the NZ case (IMO $5K or $10K is a joke to the cost of buying a house in NZ which is around 1% of the value of the house? Give me a break). Did I not mention the taxation on capital gains in Canada?

Having just recently purchased a house in NZ, the disclosure to IRD is relatively vague. In Canada you must disclose the use of the house ; intent ; purchase for investment? ; etc. and it's a LOT more difficult to game the system there than in NZ. What we see in NZ is relatives, family members are buying houses in each of their name and claiming as their own personal residence while they conduct renovations with INTENT to flip the house in 2 to 5 years time. THIS is the reason why you have a bubble and not the 1st time home owners wanting to get in.

I've been hearing the same story that the housing bubble caused by excessive immigration. Well i'm finding houses are coming down since the ban on foreign buyers. With AML, it makes buying houses even more difficult so I expect long term, houses aren't going to go up much. On some part, the NZ gov't is at fault for not making the construction of new houses more affordable ; over-regulations (ie RMA, Council restrictions ; and recently Maori protests of land use north of Auckland) sets the attitude that "Yes we want affordable houses but.... not in my back yard". Nothing will change and the losers will be the next generation when they go buy their own home... going into more debt". Remember Auckland house prices are not unique - same deal in Vancouver. But what I see happening there is a hell of a lot more than what NZ is doing.