Innovative financing for home ownership
Summary
This project provided an appraisal of the appropriateness and potential for shared equity/ownership models to assist households into affordable home ownership. Interviews were conducted in three states with existing shared equity consumers and institutional stakeholders from the private sector. Focus groups were held in three cities to determine the views of potential consumers. There is consumer appetite for shared equity schemes. Most people prefer schemes that allow the consumer to staircase to full ownership and choose their own house in the private market (rather than be limited to particular stock) and to capture equity gains by selling in an open market. Most shared equity schemes currently in place in Australia offer those features. Private sector investors and lenders are interested in shared equity schemes; however remain cautious because of unfamiliarity with the product. Government backed agencies have been instrumental in driving innovation and establishing shared equity schemes, especially in states with a good track record of affordable home finance provision. The fragmented nature of shared equity schemes across different jurisdictions suggests that there is a role for National leadership at a policy and regulatory level, and potential for state and territory involvement in supporting government run schemes.
Project Number: 70394
Research Theme: Home_ownership
Project Leader: Randolph, Bill
Funding Year: 2007
Research Centre: UNSW-UWS
Research & Policy Bulletin
Issue 124: How can shared equity schemes work to facilitate home ownership in Australia?
Small, well-targeted shared equity schemes provide an opportunity for lower and moderate income households to achieve home ownership in Australia. Government involvement is required to manage the risks associated with achieving affordability objectives whilst maintaining the financial viability of the schemes.
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Description
To date, government interest has translated in practice into a number of significant although relatively modest schemes; and product development has largely been left to the banks and financial providers. The focus of these emerging products has not necessarily been simply on improving access to affordable home ownership for targeted groups unable to access home ownership via normal purchasing arrangements. This points to the need for clear policy frameworks within which home ownership assistance schemes and financial products can be positioned and supported. It also recognises that the feasibility and potential success of such approaches will relate to wider policy objectives in terms of housing affordability, encouraging access to home ownership, and the creation of strong and sustainable communities.
More Information
Positioning Paper: No. 106: Innovative financing for home ownership: the potential for shared equity initiatives in Australia
616 KB PDF Document
Final Report: No. 137: Innovative financing for home ownership: the potential for shared equity initiatives in Australia
888 KB PDF Document
Research and Policy Bulletin: Issue 124: How can shared equity schemes work to facilitate home ownership in Australia?
313 KB PDF Document
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