Home Ownership Scheme Helps Social Housing Residents Buy First Home


A new project developed and tested in Melbourne could help social housing residents find a pathway to homeownership.

The project, known as the the Barnett Model, has enabled long-standing social housing tenants to buy into a 34-unit, Fender Katsalidis-designed unit block in North Melbourne.

The model, formerly the Melbourne Apartments Project, relies on a deferred second mortgage that allows homeowners to pay approximately 63 per cent of the apartment’s market value upfront.

The remaining value is covered by a no-interest, no-fee loan (“Barnett Advance”) that reduces over time and isn’t payable until the homeowner sells their apartment.

While a standard homeowner builds equity in their home over time, a purchaser using the Barnett Model builds equity in their Barnett Advance, reducing the loan value over time.

The model is managed by the Barnett Foundation and delivered by a private not-for-profit developer with the support of Melbourne City Mission.

Related: Ten Lessons from Cities that Have Risen to the Affordable Housing Challenge

The Barnett Model
The model requires participants to pay at least a $25,000 deposit and source a loan to cover the remaining development costs of an apartment.

An evaluation by the University of Melbourne has found that the model addresses two key barriers to home ownership: the requirement of a high deposit, and the capacity to qualify for and service a large mortgage.

“Our research shows that most of the residents who bought into the Melbourne Apartment Project had been long-term social housing tenants,” University of Melbourne architecture, building and planning researcher Katrina Raynor said.

“They had been dreaming of homeownership for a long time but had never had the capacity to buy a home until now.”

“Currently no consistent mechanisms designed to support developers or not-for-profit organisations to develop affordable homeownership options for social housing tenants or low income households.”

Researchers found the Barnett Model both scalable and appropriate for a subsection of social housing tenants that are likely to benefit from the opportunity to transition into homeownership.

“The report demonstrates this innovative and realistic initiative can provide a successful pathway into homeownership for social housing residents,” Melbourne City Mission chief executive Vicki Sutton said.

“This opportunity also frees up social housing for many people languishing on social housing wait lists.”

This model, considered under the broad umbrella of shared equity homeownership models, now looks to help "high capacity" social housing tenants transition into homeownership and create vacancies in social housing for those on the waiting list.

Plans are already under way for crisis accommodation in Frankston and another Barnett Model development in Brunswick to extend the shared equity home ownership model developed as part of the original Melbourne Apartments Project.

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