BNZ announces whenua Māori mortgage breakthrough

Friday, 12 January 2024

Kāinga Tuatahi built by Ngāti Whātua Ōrākei for hapū members to buy and own.

Bank of New Zealand Te Pēke o Aotearoa says it’s finalised a new lending model for whānau buying homes on whenua Māori without the bank taking security over them.

The new lending model was developed to enable hapū members of Ngāti Whātua Ōrākei to get home loans to buy 24 new whānau homes under construction on Hawaiki St, Ōrākei in Tāmaki Makaurau Auckland.

Under the new model, hapū members who met BNZ’s normal home lending criteria would be able to get BNZ home loans to buy the homes on the land owned by the Ngāti Whātua Ōrākei Trust at standard home loan interest rates.

Historically, banks have shied away from giving home loans for housing on Māori-owned land because they can’t take the land as security for loans.

But BNZ had signed a “deed of understanding” with Tāmaki tangata whenua Ngāti Whātua Ōrākei, which would step in to buy any mortgages that fell into distress in the event of one of the borrowers failing to make their repayments.

It could then resell the property to other hapū members.

Pourewa Garden in Ōrākei is a Ngāti Whātua Ōrākei garden designed and built to feed iwi, but also has a goal of teaching iwi how to grow vegetables.

The deed of understand meant the bank would never be put into the position of having to enforce one of its mortgages in the event the borrower stopped paying.

Ngāti Whātua Ōrākei is developing a modern papakāinga on the historic site, with the intention of enabling hapū members to return to “village life” in homes they can own, or rent with confidence of tenure.

Grant Kemble, chief executive of Ngāti Whātua Ōrākei Whai Rawa, said the development of the model had taken several years.

“The framework has made home ownership more accessible for our whānau,” he said.

“For our people that will move into these new homes, it will be the realisation of a dream: the security of home ownership on their whenua.”

Whetu Rangi, head of Māori banking at BNZ, said the new lending model could help unlock Māori whenua for housing for other iwi without their land being put at risk.

It could remove a significant barrier for Māori home ownership, he said.

“One of the biggest struggles is the ability to unlock whenua Māori as a financial asset, especially utilising it for residential purposes. We think this is the first step in a long journey, and is hopefully something we will see again on a regular basis,” he said.

The challenge was to make this kind of lending “business as usual”, Rangi said.

The concept of a vertical papakāinga has been put forward as a way of meeting the housing needs of Ngāti Whātua Ōrākei, the Kāinga Tahi, Kāinga Rua book says.

BNZ has provided a $20 million social loan, certified by EY New Zealand, to support the construction of the homes. Ground has broken on site, with roofing expected to be laid before the summer holidays. Completion of the homes is expected in 2024.

In 2022, Ngāti Whātua Ōrākei showcased its plans for its Auckland land in the Kāinga Tahi, Kāinga Rua book published by Bridget Williams Books.

That included “vertical papakāinga”, which could play a major role in Māori being able to live on the whenua they whakapapa back to.

The hapu’s long-term vision is to ensure its people enjoy a high level of physical, emotional, spiritual and mental wellbeing, and housing is a part of that strategy.

It has been progressively developing low density housing on its land at Ōrākei, but with over 6000 members, but it may need to build higher to meet its aspirations.