The first six homes in a pioneering new model designed to offer truly affordable homes in Queenstown are complete, with households set to move in from this week.
One of the recently constructed homes to go into the Secure Home programme at Cherwell Lane in Shotover Country.
The Queenstown Lakes Community Housing Trust has just completed construction on six new homes at Shotover Country, which are to go into the pilot scheme, Secure Home. Secure Home was one of several actions developed by the Queenstown lakes District Council Mayoral Housing Affordability Taskforce which Mayor Jim Boult formed in 2017 to investigate new ways of addressing housing affordability in the district.
The first of its kind in New Zealand, Secure Home is a programme where people purchase the properties through a 100-year lease arrangement, with the Trust retaining ownership of the land in perpetuity.
QLDC Mayor, Jim Boult, says: “We’re delighted the Secure Home programme has come to fruition. It has been a long time in the making and the launch of this pilot is a huge milestone for both the Trust and Council. This is one of the key recommendations to come out of the taskforce report. Council is behind this initiative 100 percent and would like to commend the Trust for making this vision a much-needed reality for our community.”
Trust executive officer Julie Scott adds: “The essence of the Secure Home programme means a household will be able to purchase the home at an affordable price through their own mortgage and deposit. They will then pay a very low ground rent on the land, which will only ever increase annually and in line with inflation.”
Qualifying households purchase the leasehold property with an upfront payment, which is set at the cost of house construction. These range from $320,000 for a two-bedroom property to $400,000 for a three-bedroom property.
The household then pays a ground rent that is set at 1.5 per cent of the land value, and adjusted annually with inflation.
“A typical commercial lease would expect a 4-5 per cent return so we’re very happy to be able to do this at 1.5 per cent. For example, a $300,000 section would return a ground rent of $4,500 per annum, or $86.50 per week,” Scott says.
Another key aspect of the programme is a restricted resale clause, whereby the property can only ever be sold back to the Trust at the original purchase price plus inflation for the years the owners have been in the house.
“So if the original house price was $350,000, and inflation was two per cent every year for, say, five years, the resale price after five years would be $385,000. The homeowners would realise a modest amount of appreciation on the property,” she explains.
The property will then be sold to the next household on QLCHT’s waiting list, ensuring the property remains affordable in perpetuity.
With nearly 600 households on the Trust’s waiting list, Scott has had no shortage of interest in the properties, and has households lined up to move in from March 1, 2019.
“When your options are either keep paying excessive rents, or buy your own home under a permanently affordable assisted-ownership model, it becomes a pretty simple choice,” she says.
Breen Construction commenced construction of the homes in July last year, on land transferred to the Trust by Shotover Country developers as part of Queenstown Lakes District Council’s Special Housing Area process. These turnkey homes include drapes, carpets, landscaping and fencing.
Mayor Boult reflects that the original goal of the Mayoral Housing Affordability Taskforce was for all of our workforce to be able to own or occupy a home in our district at a cost that allows them to live within their means by 2048. “We have a long way to go to meet that goal but innovative solutions such as the Secure Home programme are a real success in helping the locals who are struggling today.”