Laying the foundation for homeowners

Mangere couple John and Leutu Figota are on the way to becoming homeowners, thanks to a home equity plan sponsored by the New Zealand Housing Foundation.

The foundation, created by a $1 million-plus investment by the Tindall Foundation, bought a run-down bach on a corner section in Mangere East and built two four-bedroom houses on the site for $250,000 each, including the land.

The Figota and Davis families moved into their houses on Thursday and will pay rent at undisclosed exact rates, but between $325 and $425 a week, until they can afford to buy the houses.

Foundation director Brian Donnelly estimates that when they buy, each house will be worth "a whole lot more" than $250,000. But the foundation will sell them at the cost price plus only 25 per cent of the subsequent rise in value up to the date of sale.

The rest of the increased value will be gifted to the families as a "deposit".

"For example, if the property increased by $40,000 between the time they occupy it and the time they buy, the family would receive $30,000 of that value as their equity deposit," Donnelly says.

Families must have a combined household income of at least $55,000 a year to get into the scheme - an amount that would once have been easily enough to save for a deposit on a house.

But the region's house prices are now so high that even families on that kind of income cannot get a deposit together.

Malcolm and Phyllis Davis, who have been in a Housing NZ home in Mangere originally rented to Phyllis' parents 41 years ago, have had a run of unexpected expenses. "We've had a lot of deaths. For years now we were forking out for funerals."

They have children aged 16 and 11 and a 27-year-old nephew living with them. Although Malcolm works as a recreation programmer and Phyllis as an accounts administrator, they have not been able to save a deposit.

The Figotas also work, John as a customer service officer for an engineering company and Leutu at the Wiri distribution centre of Stephen Tindall's The Warehouse empire. Yet they have spent the past three years in a Monte Cecilia emergency house. Monte Cecilia chairwoman Sister Mary Foy says she considered asking the Figotas to move on, but recognised that they were "passionate about actually getting their own home".

"It's not easy for families who work to achieve home ownership today," she said. "So thanks to the NZ Housing Foundation for making it possible."

NZ Housing Foundation, PO Box

36 027, Northcote 1310, Auckland.

Ph 09 443 8415.