Media Release

Monday 19th March 2007

Housing help inadequate

“Government plans to assist home buyers by introducing home-ownership shared equity schemes may be well-intentioned but are uninspired and will prove inadequate” said Stephnie de Ruyter, DCS Leader.

Ms de Ruyter noted that similar schemes, such as the Western Australian programme, had added further inflationary pressure to the housing market, leading to an increased debt for home buyers but a greatly enhanced profit margin for the share holder.

“First home and low-income buyers need to beware. They need to apply the adage that if it sounds too good to be true, it probably is.

“Household debt levels in New Zealandare already dangerously high. Enticing home buyers to enter the market at a level which is unaffordable is a recipe for disaster. The advantages of this scheme are weighted in favour of banks, lenders and the government. It offers false hope to people wanting somewhere of their own to live and raise their families. That hope is not unreasonable in a country which purports to be a property-owning democracy, but will not ultimately be realised by participants in shared equity schemes” Ms de Ruyter said.

She noted that the DSC Housing Plan offered a comprehensive, sustainable solution for first home and low income buyers.

“DSC is committed to: enabling home ownership through the provision of low interest loans for first homes; helping young and low income families into homes; establishing a dedicated savings scheme to be administered by the Reserve Bank; and financially supporting energy efficient, environmentally friendly renovations.

“Instead of relying on commercial banks or taxpayers’ dollars, the publicly owned Reserve Bank must be utilised for this purpose” Ms de Ruyter concluded.

ENDS

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