Labour retreads equity-sharing scheme
It was deja-vu all over again for me when I read the Herald this morning. “Labour plans equity scheme for first home buyers”.
Apparently it worked quite well in the UK, says the Herald.
But what appears to have gone unnoticed is that Labour rolled this one out in the mid 80s and well I remember it.
You see dear reader, I was a young dad at the time thinking, “Jeez house prices are getting up. You can’t get much for under $50,000 these days. How am I ever going to get a deposit together?
Then we heard about this new Equity Sharing Scheme. Some of the details have faded from memory, but I remember we and a whole bunch of other poor families went into some sort of draw. We all had to troop down to a shabby government office where Phil Goff, wunderkind of his time, kept about 30 people with restless kids waiting for close to an hour beyond the scheduled time for the draw while he hobnobbed with the press, extracting every last ounce of publicity he could out of the event.
The kids got more restless and still he didn’t arrive to put us out of our misery. The kids started crying and running around and then, finally, Goff emerged to announce the lucky winners, each of whom would get brand new homes in Te Atatu North, West Auckland.
We didn’t win and in retrospect I am sure glad of that. The scheme turned out to be a bit of a crock as almost all the gains you can make from property in New Zealand, especially when you are on a low income, are capital gains. If you have to share those with someone you end up going backwards.
And if the market goes backwards, as believe it or not it sometimes does, you may as well be paying rent.
We were lucky. We managed to get into a home, courtesy of a “loan” from my parents (you know the kind that never gets paid back). We did alright over the next few years thanks to that.
If there is one word of advice I’d like to give to anyone in a similar situation, look at this scheme very, very carefully and do whatever you possibly can to get a deposit of your own together. Oh, and in the unlikely event Phil Goff is the government’s front-man, make sure he looks after his voters and their kids this time before he whores himself for the media.
Under the scheme, the Government would provide a portion of the purchase price to help low and middle income earners who found it difficult to save for a deposit and who might not have sufficient income to service a full commercial mortgage.
Apparently it worked quite well in the UK, says the Herald.
But what appears to have gone unnoticed is that Labour rolled this one out in the mid 80s and well I remember it.
You see dear reader, I was a young dad at the time thinking, “Jeez house prices are getting up. You can’t get much for under $50,000 these days. How am I ever going to get a deposit together?
Then we heard about this new Equity Sharing Scheme. Some of the details have faded from memory, but I remember we and a whole bunch of other poor families went into some sort of draw. We all had to troop down to a shabby government office where Phil Goff, wunderkind of his time, kept about 30 people with restless kids waiting for close to an hour beyond the scheduled time for the draw while he hobnobbed with the press, extracting every last ounce of publicity he could out of the event.
The kids got more restless and still he didn’t arrive to put us out of our misery. The kids started crying and running around and then, finally, Goff emerged to announce the lucky winners, each of whom would get brand new homes in Te Atatu North, West Auckland.
We didn’t win and in retrospect I am sure glad of that. The scheme turned out to be a bit of a crock as almost all the gains you can make from property in New Zealand, especially when you are on a low income, are capital gains. If you have to share those with someone you end up going backwards.
And if the market goes backwards, as believe it or not it sometimes does, you may as well be paying rent.
We were lucky. We managed to get into a home, courtesy of a “loan” from my parents (you know the kind that never gets paid back). We did alright over the next few years thanks to that.
If there is one word of advice I’d like to give to anyone in a similar situation, look at this scheme very, very carefully and do whatever you possibly can to get a deposit of your own together. Oh, and in the unlikely event Phil Goff is the government’s front-man, make sure he looks after his voters and their kids this time before he whores himself for the media.
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