The Scheme That Vanished Fast

SPEAKER_00 0:10

In 2021, Kayanga Aura announced that they had a really cool scheme, which is called Kayanga Aura Partnership Scheme. And what it meant is that they could buy a house with you up to 25% or 200k, and then you can buy them out over the next 15 years. What gets me is that this scheme is so popular that it had to close. I've got the crunch with me. We're gonna talk about this. But guess what? Nobody knows how many people it actually helped. I've tried digging around. I've tried to put my journalism hat on, and I've tried digging around to see how many people it actually helped. And the official sites doesn't say anything, it just says hundreds.

SPEAKER_01 0:52

Yeah.

SPEAKER_00 0:53

It had about 400 people that went through the process apparently, and two and a half thousand people were eligible. So, what I'm hoping to achieve with this episode is demystify a couple of things that we're still getting asked by our clients, but also put out a call to action to any brokers,

Hunting For Real Outcome Numbers

SPEAKER_00 1:10

advisors out there, or even the banks, if you want to come on the show. I want to know the numbers. I want to know how many people actually benefited from that scheme because I cannot find any of that information. And I've got like the whole step-by-step of what actually happened. So, Kunch, what do you know about that scheme? Because you were working in the bank at that time. You weren't a mortgage advisor. No. Do you know anything about that scheme?

SPEAKER_01 1:35

No, I I actually don't know too much about this one. I my understanding is that it was to purchase property off kind order or that previously known as Housing New Zealand. So they obviously owned property, but then the renters or whoever qualified and or had met their criteria could buy in partnership with them where they the deposit part, they took out a loan jointly in the with um Kyanga Order for that deposit part. And then it's like a rent-to-buy sort of thing from Kyanga Order. That is my understanding.

SPEAKER_00 2:15

Yep. So my angle here is that for those people that are listening and you did that scheme and you bought with Kayanga Aura in partnership, this is your time to buy them out.

SPEAKER_01 2:24

Yeah.

SPEAKER_00 2:25

You don't want to wait

Buyout Maths Before Prices Rise

SPEAKER_00 2:26

until the prices of your houses go up again to buy out Kayanga Aura. Because the way I understand, if they put in, let's say 5% or 10% or 20% deposit, it says up to 25, whatever they put in, you have to buy that equity back. Yeah. So if the house was worth 500k and they put 20% deposit, that's 100k. Yeah. Right. So over the next 15 years, you have to buy back that 100k. But if the house suddenly is worth 1 million in 15 years' time, you now owe them 200k. Yeah. Yeah. So this is where I think people really need to get savvy and go, hey, hey, hey, stop. We need to buy buy you up now. Yeah. Cool. So that's point one that I wanted to make. Now, point two, that program shut down in 2023 because apparently they were fully subscribed. Right? They approved

Eligibility Changes And Sudden Closure

SPEAKER_00 3:18

way too many people.

SPEAKER_01 3:19

Yeah.

SPEAKER_00 3:20

Because in August 2023 they widened eligibility. Yeah. So people that had bigger incomes and stuff like that and homes outside of certain they could do it. And also they could have bigger farners included. So before it could be like only two people, for instance, that could buy in, then they allowed more people to be part of this program. But because they had 450% increase in applications that month, 450%, they had to shut it down. Absolutely shut it down. But somehow, somehow, any of their reports when I dig through Kayanga Ora's quarterly reports, the first home loans, first home grants, tenant home ownership, Kiwi Savvy withdrawals, everything, nothing appears on those reports. How many people got in? That's because the government probably doesn't want you to know. But I'm wondering why. Like Ireland has their numbers out. They've put out that you know they had 10,000 applications approved and 5,000 applications settled. Yeah. And New Zealand version only says hundreds. That's probably because in a too hard basket for them.

SPEAKER_01 4:31

But I think it's also because it was such a short-term scheme as well, right? When when did it start? In 2020. 21. 21 and then 23 it kind of got too popular and then they stopped. They broke themselves, sort of thing. So it was so short short. Yeah. Yeah. Maybe they just didn't keep the numbers. It was pretty much, oh, the scheme's over now, we're just gonna shut it down. Onto the next project.

SPEAKER_00 5:01

Yeah. Well, this is where, you know, I've got these questions in my head. Is this an accountability gap or has demand just out spaced out spaced the funding so badly that they don't want the numbers to be out there? Like they don't want us to know.

SPEAKER_01 5:15

It was demand versus funding, right?

unknown 5:18

Yeah.

SPEAKER_00 5:18

I want to hear I want to hear theories. I want our listeners to hook onto this episode and tell us what they think.

SPEAKER_01 5:25

Yeah, it's probably a demand. Demand thing. Demand thing. Yeah. Because it it it obviously suits a niche group of people as well, right? For those that don't have a deposit, this is the best way to get into the

Who It Suits And The Hidden Costs

SPEAKER_01 5:40

market or to into the home ownership side of things. Yeah. And it it'll be, you know, targeting Fano that have lived in that property for years as well, like 20 odd years and don't want to leave because uh, you know, they've created a whole this home there. Yeah. Yeah.

unknown 5:59

Yeah.

SPEAKER_01 6:00

So it'll be it'll be that kind of market as well, I think.

SPEAKER_00 6:03

But I also know some uh first-time buyers that bought in like into brand new places and went half half with Kayanga, so they might only have you know 5% deposit, and Kayanga came up as the rest of money. Or I think at that point you could choose how much partnership. But the downfall of it as well, I remember talking to one of the clients, she said that with the Kayanga Aura partnership, you needed permission from them if you wanted to do anything in the house. So if you wanted to, because they're obviously on the house with part of the house, yeah. Yeah, yeah. If you wanted to renovate the house, if you wanted to, you know, even plant things outside or whatever, like they actually have control and say over what you can or can't do with the property. Yeah, so they were your landlords, then they became joint owner of you.

SPEAKER_01 6:47

Yeah, you kind of didn't actually win. No, you didn't. Yeah, you literally yeah, got a mortgage.

SPEAKER_00 6:55

Yeah. And then if you have to pay them out at a high market, then you lose even more. Yeah.

SPEAKER_01 7:00

That'd be interesting though, that one. Like, did they set a price in terms of like the payout, you know, or is it through market value?

SPEAKER_00 7:09

Well, the one I've seen, one document I

Market Value Buyouts And Pushback

SPEAKER_00 7:12

seen from a person that came to me after they've already done all of that, because we couldn't do those loans. I think they had to go direct through Westpac and someone else at that point. And I remember looking at one of the files, and it was around Kayanga order will agree with you on the market value at the time, but they can also disagree. Like if you went to them now and you said, Hey, I want to buy you out, and if they see they're gonna be losing money, so if they're putting 100K and now you want to pay them 50k, they'll they also have the right to say no. So they might wait for better times or whatever. But it definitely goes with the market value, yeah. Yeah, and the share gets locked in. So if they're putting 20%, then that's their share. Yeah. And you also have opportunity to buy them out their shares, certain percentages of shares every year.

unknown 8:01

Yeah.

SPEAKER_00 8:01

So you don't have to buy everything at once, you can actually buy portions. So this is where if you're suddenly earning more money, if your house went up in equity and you can afford more, if you've got lump sum of money, this is the time to buy back the Kayanga ora shares. Interesting. Yeah, so there's a lot. I really, really want to get someone um here. So if you're listening to this podcast and you know someone, or you're going, oh my god, I didn't know that about that, please, please, please reach out. This is uh like really piqued my interest. My journalist hat went on. But um, the other thing we just want to remind people is that that system has closed, it's no longer available. However, you can still get into the property with at least 5%

Other Ways To Buy With 5%

SPEAKER_00 8:42

deposit. Yes, you can. And there are a couple of loopholes to do that.

SPEAKER_01 8:47

And I think we've done a few episodes on that 5%.

SPEAKER_00 8:50

We have as well, but it's always nice to remind people they forget. They do forget. Because they all hear on the news is that you need to have 20%, or you know, such a myth. Yep. And I just want to remind investors as well, there's actually an opportunity to get in with turnkey properties or build properties with 5% or 10% deposits as well. Yeah, even as an investment. Yep. You don't actually need 30%. Correct. So we'll just leave it at that. And really looking forward to hearing.

SPEAKER_01 9:17

You'll reach out if you want to find out more.