Most eligible renters still don't know the pathway exists.
Around 152,000 New Zealand households earn enough to cover mortgage repayments but remain locked out of homeownership by the deposit gap, according to research from Westpac and Deloitte, as reported by Stuff, yet only about one in three of those eligible households is aware shared ownership pathways exist.
How the model works
Shared ownership schemes, such as the one run by charity Housing Foundation, allow buyers to purchase a share of a home, typically around 60%, using their own deposit and a mortgage, while the provider retains the remaining share interest-free.
Families generally have up to 15 years to buy out that share, though most do so within six or seven years. Applicants typically need only around $30,000 for a deposit, depending on individual lenders' requirements, and must meet income and affordability criteria, including household earnings under $120,000 and mortgage repayments capped at roughly 30% of gross income.
The Westpac NZ Shared Home Ownership Report, authored by Deloitte, estimates that removing current barriers to scale could unlock an additional 10,000 shared ownership homes within three years.
Housing Foundation chief executive Dominic Foote (pictured) said the model serves households that have no other options.
"Our families come from renting backgrounds. They do not have the ability to draw on the bank of mum and dad... they have nowhere to go and are stuck paying unaffordable rents for the rest of their lives," Foote said.
Demand rising, deposit gap widening
Foote said rising house prices mean even KiwiSaver savings often fall well short of what's required for a conventional purchase.
"They might have a $50,000 deposit and qualify for a $450,000 or $500,000 mortgage. But the house costs $700,000," he said.
Foote's example reflects a wider pattern: Cotality's latest Housing Affordability Report found it still takes a median household 9.6 years to save a full 20% deposit, down from a post-COVID peak of 13.4 but still above the long-term average, underscoring why alternatives like shared ownership remain relevant even as affordability improves overall.
Demand for the Housing Foundation programme has grown accordingly, with more than 300 registrations a month, roughly double the volume seen a few years ago, though Foote noted around half of applicants are not yet financially ready to enter the scheme.
Families who don't yet have the minimum deposit can enter a rent-to-own pathway instead, renting for up to five years with payments capped at around 30% of gross income before gaining the right to purchase the home.
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