More money for used house buyers

Press, 18 October 1976, Page 12

More money for used house buyers

PA Wellington The Government would gradually direct an increasing proportion of the State contribution to housing towards placing young people in used houses “rather than in the higher priced new houses,” the Minister of Housing (Mr Gair), said on Tuesday. Mr Gair said that the inflation of recent years in new building costs had the effect of directing the lower-income applicants for State assistance towards properties in the $25,000 to $30,000 range. These frequently required more than one mortgage, and placed great burdens on a young couple, Mr Gair said.

“At the same time, those with better incomes who do not qualify or do not seek State support, have directed their attention towards used properties, many of which are below the $25,000 to $30,000 mark,” he said.

“It seems this anomalous situation is becoming increasingly less satisfactory.” Mr Gair said that he thought the position could be met by developing an idea introduced this' year, at the time the Government changed the public sector security ratios for the trustee banks from 49 per cent to 47 per cent. The banks were told that the money released in this way was to be used for house construction, or could be lent for the purchase of a used house if the vendor of the used house was, himself, buying a new house. “This policy helps direct

people towards houses suited to their needs,” Mr Gair said.

“The young couple with little money often want to buy the inexpensive used property, which they can enjoy doing up. “Those persons who sell used property are usually older, and therefore are more established financially. They can contemplate buying a newlybuilt home at a higher price than the basic minimum.”

Mr Gair said it was not intended that the shift in policy be sudden.