Maori who want to move back to ancestral land will now be able to get a $200,000 loan thanks to a new initiative between Kiwibank and Housing New Zealand.
Housing Minister Phil Heatley announced the partnership between Housing New Zealand and Kiwibank this morning.
The Crown would guarantee the loans under the Kainga Whenua scheme. Generally loans would be capped at $200,000 but in some cases, in more expensive areas including parts of Auckland, Wellington and Queenstown, greater limits up to $350,000 would be able to be negotiated.
The houses will have to be built on wood piles and be either in the North or the South Island so the bank can take them back if the borrowers default.
The loan will be granted without a deposit.
Borrowers’ income would be below $85,000 or below $120,000 for three borrowers in a single household.
The average expected price of a house is $175,000. In rural areas that would include septic tanks, but Mr Heatley said there was a surprising amount of Maori land in urban areas.
"Essentially banks haven't loaned on multiple-owned Maori land because they just don't have security," Mr Heatley told reporters.
"Here's Maoridom who own an awful lot of land, it's got huge value and it seems absurd to me that if they own it they should be able to build on it if that's what they choose to do... Ultimately this is available to any Maori family who want to go back to their ancestral land."
Maori Party co-leader Tariana Turia welcomed the announcement.
"We know that most Maori have a strong desire to own their own homes, but barriers such as low incomes, poor access to finance or inconsistent and uncoordinated policy responses have not aligned with Maori housing aspirations," she said.
RadioLIVE/NZPA