New paths to homeownership in NZ

Innovative options aid first-time buyers

New paths to homeownership in NZ

A significant number of first-time homebuyers in New Zealand are turning to alternative pathways to secure their first home, with many still unaware of the various options available to them, according to Westpac NZ.

Innovative financing increases

Over the past two years, Westpac NZ has facilitated the purchase of more than 11,000 homes for first-time buyers.

In the last year alone, approximately one-third of these buyers used low-deposit finance options such as Kāinga Ora’s First Home Loan programme, shared equity arrangements, or Westpac’s Family Springboard offering, which allows the use of family home equity for deposits. This marks an increase from the previous year, where only one-quarter accessed similar options.

Westpac’s commitment to home buyers

Helen Ryder (pictured above), Westpac NZ general manager of consumer banking and wealth, highlighted the benefits of homeownership and the bank’s efforts to simplify the process.

“Owning your own home usually brings long-term financial, social, and wellbeing benefits,” Ryder said in a media release. “We’re working hard to give customers the confidence and knowledge they need to get on the ladder, as well as innovative products to help get them there sooner.”

She also noted that elevated house prices and interest rates pose challenges yet stressed the availability of options to enhance purchasing power for first-time buyers.

Launch of First Home Sooner programme

This week, Westpac introduced its First Home Sooner programme, aimed at educating potential homeowners about the variety of entry paths into homeownership, including:

  • First Home Loan: Allows buying a home with as little as a 5% deposit through Kāinga Ora underwriting.
  • Shared equity: Partnerships with community housing providers or iwi organisations.
  • Family Springboard: Leveraging family support through co-borrowing or guarantees.
  • New builds: Exemption from high loan-to-value ratio restrictions.
  • High LVR loans: Options for those with less than a 20% deposit.
  • Group purchases: Buying property with family or friends.

Expert guidance available

Westpac stressed the importance of consulting with banking professionals who are familiar with the housing market and can guide first-time buyers through the process.

“We have a nationwide network of home loan experts who are local, understand the uncertainties many first-home buyers feel, and most importantly they have the know-how to support them every step of the way,” Ryder said.

Collaboration for more accessible homeownership

Despite the pause on Kāinga Ora’s First Home Partner scheme, Westpac continues to collaborate with iwi and community groups to provide shared equity and leasehold model options, having already assisted more than 500 customers through such arrangements.

“Getting more New Zealanders into their own homes requires finance and housing providers working together with policymakers to remove barriers to homeownership, and we’re proud to be leading in this area,” Ryder said.

With the increasing complexity of the housing market and the growth in innovative financing options, how are you helping your first-time home buyer clients navigate these opportunities? Share your experiences and insights in the comments section below.