Delivering pathways to home ownership

State house tenants will have the option to buy the house they are living in from Housing New Zealand Corporation from mid September, Housing Minister Phil Heatley announced today.

“Many families in state homes have aspirations to achieve home ownership. This policy is designed to provide those tenants that can afford it with another opportunity to achieve their goal,” Mr Heatley said.

Under the policy, tenants occupying state homes will be able to buy them at market prices. Those tenants most likely to be able to afford to buy are those on market rents. Of the total 5,500 tenants paying market rents, there are about 2,800 in homes eligible for sale.

Housing New Zealand’s home ownership education programme, Welcome Home First Steps, is available to inform tenants about their options for home ownership, while the corporation’s no or low-deposit Welcome Home Loan is available to tenants to assist them to buy.

“This policy will see modest uptake, in line with the current housing market. However, for those families who take up the offer it is a significant tool to help them on to the home ownership ladder,” Mr Heatley said.

“In the medium term I expect hundreds rather than thousands of tenants to buy their state house. However, it is very important that there is a visible pathway into and out of state housing, and on to home ownership as people’s circumstances improve.

“All the money Housing New Zealand earns from the sale of a home to a tenant will be reinvested back into a replacement state house,” Mr Heatley said.

“It’s a win-win. One family will buy a home, and as a result, another deserving family on Housing New Zealand’s waiting list will get a state home.

“The numbers of state houses will not decrease; in fact they will increase by 1,550 over the 2008/09 to 2011/12 period due to capital injections and better use of Housing New Zealand’s internal funds.”

Housing New Zealand has always bought and sold properties, constantly amending the distribution of state housing to meet demand. In the past decade it has sold 811 state houses, but Labour never had a policy to offer them to tenants.

Further details of the policy will be available when it is launched in early September. In the meantime, state tenants can register their interest in buying their home from Housing New Zealand on 0800 801 601.

Q&A

Are all state houses eligible for sale to tenants?

No, Housing New Zealand is only selling to tenants stand-alone, freehold houses that are not of strategic importance to the state house network. Housing New Zealand also requires the houses to be on its land (not Crown land), have a clean title and not subject to the Public Works Act or future Treaty of Waitangi settlements.

Will the houses be available to the private market if tenants don’t wish to buy them?

No. The only homes that might find their way to the private sector if tenants don’t wish to buy them are those vacant, surplus properties in areas of low demand for state housing. These properties are already sold to the private market, and have been for the last 10 years. Labour sold 811 such surplus houses.

How much will Housing New Zealand be selling the houses to tenants for?

The sale price will be determined by independent valuation.

What financial assistance will Housing New Zealand give tenants wanting to buy their house?

Housing New Zealand has a no or low-deposit home ownership product called Welcome Home Loan: www.welcomehomeloan.co.nz. The corporation also offers a free home ownership course called Welcome Home First Steps.

What should tenants do if they are interested in buying a home?

Contact Housing New Zealand on 0800 801 601. They will register your interest and get back to you when the policy is officially launched.