Queenstown’s pioneering Secure Home scheme reaches new milestone

The first six homes in a pioneering new scheme designed to offer truly affordable homes in Queenstown are underway.

Queenstown Community Housing Trust is building two 2-bedroom and four 3-bedroom homes at Shotover Country as part of its pilot scheme, Secure Home.

The first of its kind in New Zealand, Secure Home is a programme where people purchase the properties through a 99-year land lease arrangement, with the Trust retaining ownership of the land in perpetuity.

The six lots in Shotover Country’s Cherwell Lane were transferred to the Trust by the developers as part of Queenstown Lakes District Council’s Special Housing Area process.

“The essence of the Shared Home programme means a household will be able to purchase the home at around the cost to build it, excluding the land cost,” Trust executive officer Julie Scott explains. “They will then pay a very low ground rent on the land, which will only ever increase annually and in line with inflation.”

In the pilot, low ground rent will be set at 1.5 per cent of land value. “A standard lease would expect a 4 to 5 per cent return so we’re very happy to be able to do this at 1.5 per cent. For example, a $300,000 section would return a ground rent of $4500 per annum, or $86.50 per week,” Scott says.

Another aspect of the programme is a restricted resale clause, whereby the property can only ever be sold back to the Trust at the original purchase price plus consumer price index for the years the owners have been in the house.

“So if the original house price was $400,000, and inflation was two per cent every year for, say, five years, the resale price would be $440,000. The homeowners would realise a modest amount of appreciation on the property,” she says.

“This will ensure the property remains affordable for future home owners.”

Households will be able to enjoy every aspect of homeownership, except the ability to make large capital gains.

With more than 500 households on the Trust’s waiting list, Scott has no concerns there will be good uptake on the new programme.

“When your options are either keep paying excessive rents, or buy your own home under a permanently affordable assisted-ownership model, it becomes a pretty simple choice.”

Civil works were completed earlier this month, with each house at various stages of construction. Breen Construction is building the homes, and they are expected to be complete by early 2019.

Secure Home was one of several actions developed by the Mayoral Housing Affordability Taskforce which ran last year.

Taskforce Chair and QLDC Councillor, John MacDonald, says: “We’re very pleased to see progress is being made with this programme. This is one of the key recommendations to come out of the taskforce report, and Council is behind the Trust 100 per cent.”

ENDS

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