KEY POINTS:
If it wasn't for the Government's shared equity scheme, Benjamin Jeffares and Sunflower Feltham would have faced a hard choice - a home or a family.
The couple, 29 and 31, have been together since they were high school sweethearts 14 years ago. They want to have children, but they wanted a house first, and until now that has been impossible in Auckland.
"We decided four years ago to plan for a house and started saving for a deposit. We saved about $40,000," says Mr Jeffares, a sales representative for an electronics business.
"But we would not be able to afford the repayments unless both of us were earning, and we planned to start a family within the next year."
Ms Feltham has already stopped work to train as a midwife and wants to be able to stay home to look after her own baby before seeking work in her new field.
The shared equity scheme proved their saviour. They applied for it as soon as the scheme started on July 1, their names were drawn from a ballot the same month, and they bought a cottage in Avondale for $305,000 within days.
They put in $34,000 from their savings, using the rest for insurance and other costs. They borrowed $198,000 from Kiwibank and the Government chipped in $73,000, taking a 24 per cent share in the property.
If they sell, the Government will get 24 per cent of the proceeds. But the couple have a home at a price that will enable them them have children.
"We feel like we've won Lotto," Mr Jeffares said.
They are among a tiny, lucky handful of winners. Only 12 shared equity deals have been approved, and the scheme will help only 700 first-home buyers in the next two years, about 1 per cent of the number of houses sold in New Zealand in the past year.
But the shared equity scheme is also only one of a range of ideas being offered by election contenders to help young people into their first homes.
Houses have become unaffordable for many. Prices have dropped slightly, but the median sale price in Auckland last month was still $420,000, or 6.5 times the region's median annual household income.
As a result, home ownership (including family trusts) has declined nationally from 75 per cent in 1991 to 67 per cent at last count in 2006.
This matters, because a stable home and schooling give children the best possible start in life and builds strong, caring communities.
That is why governments from the 1930s until the 1980s have given cheap loans to help young people buy their first homes, and provided state houses for those who could not afford to buy.
Both policies ended under the National Government of the 1990s.
Housing NZ mortgages were sold, and state house rents were raised to market levels, with an income-tested accommodation supplement to help poor people cover housing costs in either the public or the private sector.
In the past nine years, the Labour-led Government has restored the earlier consensus. It has brought state house rents back down to 25 per cent of the tenants' incomes and got back into home lending by establishing Kiwibank, which lent 17 per cent of all bank loans in the three months to June.
Labour's package of schemes now includes shared equity for first-home buyers on household incomes of $55,000 to $85,000, low-deposit Welcome Home loans, also for household incomes up to $85,000, and a grant of up to $10,000 a couple to first-home buyers who have both saved 4 per cent of their incomes through KiwiSaver for at least three years and have household incomes of up to $100,000.
Labour also raised the accommodation supplement in its Working for Families package for families on up to about $72,000, and last week it unveiled a new scheme for families earning around $44,000 to $55,000 a year to build cheap "starter homes" on Crown land, with the land staying in state ownership to minimise the up-front cost.
The National Party has repudiated its policies of the 1990s. It promises to keep state house rents at 25 per cent of incomes, keep Kiwibank for at least three years, and keep shared equity, Welcome Home loans, accommodation supplement and KiwiSaver.
It would pay the KiwiSaver subsidy if people save 2 per cent of their incomes instead of Labour's 4 per cent.
It also got in before Labour with a scheme to let first-home buyers build on Crown land so they have to pay up-front only for the house, not the land.
Unlike Labour, National would let them buy the land later at its original value plus 3 per cent a year for every year they have lived there.
National, Act and NZ First also propose streamlining planning and building laws to reduce costs of new homes.
