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Property within reach

Letter

We all know we have a severe housing shortage in New Zealand, and now have rapidly rising house prices that are making it very hard, especially for first-home buyers to get their start in home ownership.

The section cost is where the main price increases are coming from, not the cost of materials, so why don’t the powers that be go back to the tenure used so very successfully from the 1950s where the Crown and Maori (and other land-owning authorities — now including District Councils) who still own large areas of suitable land, put in place the availability of sections on a “perpetual leasehold” basis?

This would substantially reduce the cost of getting into a house. The terms of the lease would provide for regular rent reviews every five years, based on the Consumer Price Index, but with the right when the homeowner’s financial position improves, to freehold the lease at the market value.

In the past the Crown financed this freeholding by way of a deferred payment licence, which became a prior charge on the title ahead of any mortgage(s), but of course the value of the property increased by at least the amount of this licence so mortgagees did not lose any security margin.

This would mean that in Gisborne, the cost of owning a new house would be reduced by at least $250,000, allowing a lot more people into home ownership.

With resource management compliance being streamlined (???), bare land already available (Childers/Roebuck convent site for example), it can happen quite quickly.

John McElhinney