New funding packages will result in a mass home upgrade

Given the right policy package, 210,000 owners will take up private loans and public grants to upgrade in the next 12 months, according to new research released today.

This scale of response will result in thousands of building sector jobs being secured, but also go a long way to resolving the country's major housing problem: a million of the nation's 1.6 million homes are not fully insulated, 45% are mouldy and nearly a quarter are reported to be making their occupants sick.

The New Zealand Business Council for Sustainable Development, which last November produced a major report on how to solve the problem, arising from a $300,000 two-year long research project, is today releasing further research on what home improvement funding options Kiwis will accept to improve their homes.

The weighted ShapeNZ survey of 2,610 New Zealanders in April this year shows 71% of homeowners, and 61% of rental property owners, say their properties could be warmer and more comfortable.

The major cause of inaction on the problem is cost: 59% say they don't have the financial means.

The Business Council, working with the building, real estate, banking and energy sectors, homeowners and users and health groups, has proposed a range of public/private funding options.

Research findings announced today show, if the Government, utility companies, banks and local authorities offer loans and other incentives, like reverse equity mortgages, to home owners and landlords to upgrade their properties' performance, they will achieve a significant result:

• More than 670,000 homeowners will take advantage of loans, mortgage extensions (and Government grants aimed at those on low incomes with health issues) within the next 10 years.

• Given the right package, 210,000 would do it in the next 12 months.

The survey also finds:

• 87% believe the Government, building industry, home owners and users should jointly develop a new policy which would progressively improve New Zealand's million poorly performing homes over the next 10 years
• 67% agree that home performance ratings should be part of a home improvement policy package (only 14% disagree)
• 39% would be prepared to take up a home upgrade grant to those on low incomes or with health issues
• 26% would take up a loan from their electricity provider, paid back through their energy bills
• 22% would take up a home performance improvement loan from a bank
• 21% would take up a loan from their council to be paid back through their rates
• 29% of landlords are likely to renovate (4% definitely will) during the next year, along with 43% of private home owners
• 31% of homeowners will spend $1000 to $5000 on renovations in the next year, 13% $5000 to $10,000 and 14% $10,000 plus
• 40% of landlords will spend $1000 to $5000 on renovations in the next year, 12% $5000 to $10,000 and 6% $10,000 plus.

"The key here is providing homeowners with capital up-front, then allowing them to pay it back through electricity and other savings, rate surcharges and reverse equity mortgages," the Business Council's Chief Executive, Peter Neilson, says.

"It will also ensure performance improvement work is done when $8 billion of other home renovations are carried out each year. The country can't conquer a $22 billion home infrastructure problem on its own. An innovative private/public package is needed to ensure we cure our sick home problem.

"Another vital and well-supported element is the introduction of performance ratings for homes, letting buyers and prospective tenants know how efficient the home is. Based on overseas experience, this will lift home resale values, speed sale times and lift rents for higher-rated homes. This provides a valuable return for making the investment. It also informs choice by buyers and tenants.

"We are now working with more than 30 companies and organisations to get a single low-cost effective home performance rating in place this year.

"The research shows the solution must go beyond simply providing Government grants to insulate homes. Much more needs to be done to ensure the thermal envelope around homes is sealed and they get to an average inside temperature of 18 degrees, when all the major health benefits and energy savings are achieved," Mr Neilson says.

A home performance programme of scale will also immediately stimulate the building industry, where about 10,000 jobs have been lost, retain skilled workers - and have major benefits for other sectors, including manufacturing and finance.

ENDS

Attached: ShapeNZ_April_2009_Housing_performance_policy_survey_REPORT_9_April_2009.doc

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