What Is the Pattern of Share Ownership in Shared Ownership Homes?

When you buy a shared ownership home, you’re not buying the whole house. You’re buying a piece of it-usually between 25% and 75%-and paying rent on the rest. But what does that actually look like over time? The pattern of share ownership isn’t just a one-time decision. It’s a journey. And if you don’t understand how it works, you could end up stuck, overpaying, or missing chances to own more.

How Share Ownership Starts

Most shared ownership homes in New Zealand start with a minimum 25% share. That means if a property is worth $600,000, you buy $150,000 worth (25%) and pay rent on the other $450,000 to the housing provider. The rent isn’t set by the market-it’s usually around 2.75% of the unsold share per year. So in this case, you’d pay about $12,375 a year in rent, or $1,030 a month.

This setup is designed for people who can’t afford a full mortgage but can manage smaller payments. It’s common in Auckland, Wellington, and Christchurch, where house prices have outpaced wages for over a decade. You get a foot in the door without needing a 20% deposit on a full property.

The Pattern: Buying More Shares Over Time

The real power of shared ownership comes from staircasing-buying more shares in your home over time. This isn’t optional. It’s the whole point. The pattern isn’t random. It follows a clear rhythm:

• You buy your first share (usually 25-50%)
• After 1-2 years, you can buy another 10-25%
• Each time you buy more, your rent goes down
• You can keep buying until you own 100%

Most people staircase in stages. They don’t jump from 25% to 75% in one go. Why? Because each step requires a new mortgage. Lenders need to reassess your income, credit, and affordability each time. Many buyers wait until their salary increases, or they get a bonus, or their rent savings add up.

One Auckland buyer, Sarah, started with 30% in 2021. In 2023, she bought another 20%, bringing her to 50%. By 2025, she bought another 25%, hitting 75%. She plans to buy the final 25% in 2027. Her rent dropped from $1,100 to $550 a month after her second purchase. She’s now paying less than half of what she started with-and she owns three-quarters of her home.

What Happens When You Own 100%

Once you own the full share, you stop paying rent. You still have a lease, but it’s no longer a shared ownership lease. It becomes a standard leasehold, like any other property. You can sell it on the open market, refinance, or even rent it out-though some housing providers restrict this.

But here’s the catch: when you buy the final share, you pay the current market value. Not the original price. If your home went up 30% since you bought it, you pay 30% more for that last share. That’s not a trick. It’s fair. The housing provider didn’t make money off your rent-they just held the asset for you.

In Wellington, a couple bought a shared ownership flat in 2020 for $480,000. They started with 40% ($192,000). By 2025, the same flat was valued at $624,000. To buy the final 60%, they paid $374,400-not the original $288,000. That’s a $86,400 difference. They were shocked, but they understood: they’d benefited from the price rise. They just hadn’t factored it into their budget.

When Staircasing Gets Tricky

Not everyone can staircase smoothly. Here are the three biggest pitfalls:

1. Valuation delays - Housing providers use certified surveyors to value your home before you buy more shares. If they’re slow, you might wait 8-12 weeks. That can mess up your mortgage approval timeline.
2. Unexpected fees - Legal fees, valuation fees, and lender fees add up. Each staircasing step can cost $2,000-$4,000. Many buyers forget this and run out of cash.
3. Income limits - Some providers cap your income if you want to buy more shares. If you got a big raise, you might be blocked from buying the final 25%. This rule exists to keep shared ownership for people who need it.

One buyer in Christchurch hit the income cap after landing a promotion. He’d saved enough to buy his final 20%, but his new salary pushed him over $120,000-the limit for his provider. He had to wait two years until his income dropped below the threshold after a job change.

Who Benefits Most From This Pattern?

Shared ownership isn’t for everyone. It works best for:

• First-time buyers with steady income but not enough for a full deposit
• People who expect their income to grow over 3-5 years
• Those who want to build equity without the burden of full homeownership
• Anyone who plans to stay in one place for at least 5 years

It’s less ideal if:

• You might move in 2-3 years (selling a shared ownership home is slower)
• You’re unsure about your long-term income
• You dislike dealing with two parties: your lender and the housing provider

In Auckland, over 60% of shared ownership buyers successfully staircase to 100% within 7 years. That’s higher than in most other cities. Why? Because wages are higher, and the housing market keeps rising. If you’re in a growing area with job stability, this pattern can be a powerful tool.

What You Should Do Now

If you’re considering shared ownership, don’t just look at the initial cost. Look at the full pattern:

• Ask your provider: What’s the minimum share I can buy? What’s the maximum?
• Ask: How often can I staircase? Are there time limits?
• Ask: Who does the valuation? How long does it take? What are the fees?
• Ask: Is there an income cap for buying more shares?
• Run the numbers: What will your rent be at 50%? At 75%? At 100%?

Keep a savings buffer for staircasing costs. Don’t wait until you’re ready to buy more to realize you need $3,000 for legal fees. Start saving for it now.

What Happens If You Can’t Buy More?

You’re not stuck forever. If you can’t afford to staircase, you can stay in your home as long as you like. You keep your share. You keep paying rent. You can even sell your share back to the housing provider-or sell it to someone else who qualifies for shared ownership.

Some people choose this path because they’re happy renting the rest. Others do it because their income didn’t grow as expected. That’s okay. Shared ownership isn’t a race. It’s a flexible path.

Final Thought: It’s Not Renting. It’s Building.

The pattern of share ownership isn’t about getting a cheap rent. It’s about building ownership slowly, safely, and with support. You’re not just paying for a place to live-you’re building equity, one step at a time.

In 2025, over 12,000 New Zealanders live in shared ownership homes. Most of them started with less than 30%. Now, nearly 40% own 100%. That’s not luck. That’s the pattern working.