Ngā Take PūteaOutside the box, into a new home

Oct 2, 2012

Nā Diana Clement

“You WHAT?” This was the reaction when 20-year-old Ondine Grace told her friends that she was buying her first whare. Even more shocking for some of her friends, who had see-money-and-spend-it tendencies, was that Ondine had saved $22,000.

Ondine’s mātua had always told their tamariki to buy property as soon as they could. When the whānau returned to Aotearoa in 2008 from three years living in France, both mātua and tamariki opened KiwiSaver accounts.

Ondine began topping up her KiwiSaver account before she even started working full time – thanks in part to a KiwiSaver housing deposit subsidy, which is a KiwiSaver benefit for first-home owners. When she started a full-time job Ondine diverted eight per cent of her salary plus an extra $30 to $50 a week into the OnePath KiwiSaver. Her employer also contributed.

Ondine had other tricks to ratchet up her savings. Every day or two she would check her bank balance and transfer small amounts into her savings. If for example there was $123 in her account, she’d transfer the $23 to her savings “to help save a wee bit more”.

“I always bought second-hand clothes and I didn’t have a car until two years ago,” she adds. Even when she bought a car, she tried to drive it as little as possible.

Over the four years from 2008 to 2012 Ondine also saved nearly $4800 into Whai Rawa, a personal savings scheme for Ngāi Tahu whānui which includes education in financial/investment matters. With matched savings, annual distributions and accumulated earnings, she withdrew nearly $7,000 towards the cost of the $182,000 property.

Ondine is living proof that it’s not impossible in Aotearoa for young people to buy a whare and gain the financial stability that comes with it. Whānau do it by saving hard, and thinking outside of the square. The “it’s impossible to buy a median-priced home” attitude never got anyone into their own whare.

Thinking outside the square includes looking for Government grants and other assistance. The most obvious one is KiwiSaver. After five years a couple could be eligible for a first-home deposit subsidy of up to $10,000, and/or can withdraw their own contributions.

The Welcome Home Loan is another Government scheme that helps New Zealanders own their first whare. The scheme allows people with incomes under a certain threshold to borrow up to $200,000 with no deposit, or up to $280,000 with a 15 per cent deposit.

As well as Whai Rawa there are other schemes designed specifically for Māori. The Kāinga Whenua Housing New Zealand and Kiwibank scheme allows whānau to access funds on multiple-owned Māori land, which banks usually won’t lend on. The loans can be used to build, purchase or relocate a whare onto this land.

Some first-time buyers enter housing trusts offering shared ownership to people on low to moderate incomes. These trusts include the New Zealand Housing Foundation (for housing in Auckland) and the Queenstown Lakes Community Housing Trust. The buyers start out by owning a percentage of the property and increase their share bit by bit.

Thinking outside of the square can be quite simple. For example, first-time buyers don’t need to buy the median-priced house. An apartment or home unit is cheaper than a whare. The dream whare can come later.

Also, buyers can simply team up with whānau and friends to buy a first home, rather than going it alone.

As soon as Jeremy Kortegast realised he wanted to buy his own whare he started saving. Jeremy, of Ōnuku, and his wife Sarah wanted to settle down in their own home before their first tamaiti started school.

The Kortegasts were fortunate that they could live rent free with Jeremy’s mother for the final six months before settling on the whare.

In less than five years the couple saved $18,000 towards their deposit, but needed $28,000 before the bank would lend the remainder of the purchase price on the house in Oxford.

That’s where Whai Rawa came to the rescue. Jeremy’s matched savings, built up with small monthly automatic payments, had been topped up by Ngāi Tahu. Also, his mother transferred money from her Whai Rawa account to his. In total the Whai Rawa withdrawal amounted to just over $10,500.

“The beauty of it was it was very little for us to (put aside) each month,” he says. “It was very rewarding to see that we were getting somewhere, and not just treading water financially.”

Useful links

Kāinga Whenua loans


Welcome Home Loans

Whai Rawa

Diana Clement is a freelance journalist who writes on personal finance, and property investing. She has worked in the UK and New Zealand, writing for the top personal finance publications for over 20 years. In 2006 and 2007 she was the overall winner of the New Zealand Property Media Awards.