With 2026 being election year, we wonder if anyone will be looking to campaign on having First Home Partner open again.
It would make sense, and probably get some votes too.
Kiwi Edition wants to support first home buyers and we see this as being a positive step.
What is First Home Partner?
First Home Partner is explained on the Kāinga Ora website as a shared ownership scheme administered for first home buyers who are able to service repayments, but do not have enough savings or a deposit to receive financial pre-approval for a home loan. In reality is should not just be for people with low deposits, but is suited for people that cannot afford the size mortgage they need and therefore do not have the borrowing capacity enter the property market.
Through this program, Kāinga Ora was contributing up to 25% (or $200,000, whichever is lower) towards the purchase of a new home, which the owner then buys back over time.
Initially this was limited for brand new homes (new builds) only, but then in August 2023 the Government opened it up to any property and then Kāinga Ora quickly used up the allocated funding and had to close the scheme after just over 3-months in November 2023.
Could First Home Partner open again?
We certainly think it could, and should.
Shared home ownership is a great way for first home buyers to get into the property market, and if it was structured properly it does not need to cost the government anything.
It works overseas, and helps first home buyers get onto the property ladder.
In Australia they have Help to Buy” which is a shared equity Scheme where the Australian Government contributes towards the purchase price of your home. They contribute up to 30% (existing homes) or 40% (newly built homes) toward the purchase price and this will allow you to buy a home sooner by bridging the gap between what you can borrow and the price of a home that suits your needs.
In the UK the shared home ownership scheme sees you buy a share of the property and pay rent to a landlord on the rest. Shared ownership homes are offered by housing associations, local councils, and other organisations and they are called ‘providers’ or the landlord.
In both these countries you can buy back the share of your property at the future market value in the same way that you can with First Home Partner, and that therefore makes it a good investment for the Government rather than a pure grant. With the UK model the Government (of other owner) also receives a rent payment which probably helps compensate for the lesser capital gains that they have.
Changes May Be Needed
When we had First Home Partner open the demand was huge, but in many ways it was elevated because some of the other options were too restrictive, and so people used this when in fact they should not have needed to. This included the criteria for the Kāinga Ora First Home Loans with income caps that restricted too many buyers.
It was also treated as a grant and therefore appeared to not really be funded properly.
So here are some suggested changes:
First Home Partner should have a small ongoing cost to help encourage organisations (like KiwiSaver fund managers etc) to put money into it, and to encourage the first home buyers to try and buy out the full ownership more quickly. Even an equity fee of 2% for the first 5-years would help give the investment a return and over time they would pick up the gains on the prices increasing too. It could be that after 5-years and again in 10-years this increases to help encourage people to buy out more shares.
Also if they were to limit the amount from ‘say’ $200,000 to ‘say’ $100,000 that would still help a huge number of people. It could even be scaled so people on higher incomes are not able to borrow as much as those on lower incomes who are the people that potentially need these schemes more.
The key is to make it attractive enough for organisations that have the funds to invest some money into First Home Partner and therefore remove the reliance on Government to need to allocate limiting funding which is likely to run out again.
What Now?
We have no idea if any of the political parties are considering getting First Home Partner open again, but if they think about it they can do this without blowing the budget.
They just need to have a desire and then consider how to change it to make it attractive to the organisations that have the funds to invest. It should be no different to the private partnership deals that they are looking at for infrastructure and they could even link some tax incentives to a social investment like this too.
Our suggestion is to re-post this article in your social media and see if we can get the attention of some politicians.
