Doomers, let’s hope the U.S. government doesn’t read this one. The New Zealand government has a plan to artificially prop up home prices, I mean help first time home buyers. They are launching a plan to kick in 25-30% of the purchase price of a home: [Hat tip once more to Ken!]
The Government has confirmed plans to unveil a shared equity scheme to help people buy their first homes.
Housing Minister Chris Carter said tonight it would be a way to provide direct financial assistance to buyers faced with prices which would otherwise stop them getting into the housing market.
"You would have partial ownership and share the results of any increase in value," he said on TV3 News.
"It’s a new concept for New Zealand, we’re not sure how it will work, but it will only work if we make more affordable homes available."
TV3 said a pilot scheme was likely to start in Auckland next year which could involve the Government paying for a 25 per cent or 30 per cent stake in a house.
With all the absurd plans being kicked around Washington, we don’t need them getting any more counterproductive ideas..
twist -
I think New Zealand is still behind the curve. The UK and Northern Ireland have been getting nuttier and nuttier with their “affordability” schemes; anything rather than let prices fall. My favorite is still this one from late last year, when a young lady was happy to mortgage … “a 50 per cent share of a one-bed house in Totterdown, Bristol”
After the property goldrush / NZ
http://www.stuff.co.nz/stuff/dailynews/4042292a19716.html
Jan-Martin-
Great link- that pretty much sums up the NZ mania. Another bad case of “But our market is special, we can’t go down here!”
Let’s not be too hasty in dismissing the NZ attempt to at least be pro-active. What’s coming down the pipe?
“While it is true that assessments of the extent to which the New Deal rescued America from the ravages of the Great Depression vary widely, in any case, on this occasion perhaps we can for once commit ourselves to learning something from history. And this at a time when there is an unmistakable undercurrent of hopelessness abroad in the land. It is salutary to recall that the most pessimistic reflections on the New Deal conclude that it was all for nothing and that the real ’saviour’ lay in the dreadful carnage of the World War.”
There is no shortage of comment an analysis of this crisis. But sometimes I get the feeling that there’s a kind of ‘Universal Jonestown’ euphoria in anticipation of the potential Armageddon of a Global Depression. “I told you so,” is not going to afford much solace in a World War.
It may be sound schoolmarmish to say let’s have some constructive solutions; but what’s the alternative?
DDGrant
Home Foreclosures
Aurakill / DDGrant -
Sorry about the delay looking at your post (you caught us between shifts). We’re being as constructive as we can, and are following all the efforts to get us out of this mess, especially those coming out of Congress and the REIC itself.
Aurakill-
While being proactive is generally a good thing, there is the principle of primum non nocere, “First, do no harm,” to consider.
What is the expected effect of subsidies, say for example farm subsidies? Isn’t it that they prop up prices? When the problem is that first time buyers can’t afford homes because they are too expensive, taking measures that prop the prices up don’t make a lot of sense.
As for an alternative, first time buyers can do what I’m doing- wait. Let the market correct. Logic says that first time buyers can’t be priced out forever.