Amending the existing schemes already available for Kiwi first-home buyers will undoubtedly deliver some quick and easy wins, Century 21 New Zealand owner Derryn Mayne comments after the Government announced its KiwiBuild reset
It’s great to see that the KiwiSaver HomeStart and Welcome Home Loan schemes are getting a shot in the arm. The maximum grants for eligible first-home buyers have long been too restrictive. Best of all, this move doesn’t need any new bureaucracy or bricks and mortar.
We have existing Government-backed schemes that are working, but they just needed to be made more attractive to enable more renters to get on the property ladder. Introducing more flexible rules as well as dropping the required deposits in both schemes to five percent goes a long way to achieving that.
I accept that overall housing supply is currently an issue, but let’s not forget that there are actually a lot of new houses coming down the pipeline. Statistics New Zealand recently reported that the number of new dwellings consented nationwide was the highest since 1974. The problem for most first-home buyers is not housing availability but stumping up a deposit, which in many cases can be six figures!
With interest rates now as low as 3.55% many tenants paying record high rents could easily service a mortgage, but high living costs can make saving for a deposit prohibitive. At the same time, she believes, the Reserve Bank’s deposit requirements remain too tough thanks to its 2013 loan-to-value ratio policy.
From next year Australia is effectively adopting New Zealand’s Welcome Home Loan scheme, where a first-home buyer’s deposit shortfall can be underwritten by the Government.
In turn, it’s great that our assistance to first-home buyers is starting to look more attractive and more flexible. For the past two decades Australia’s successful First Home Owner Grant scheme has been far superior to New Zealand’s offering. Now our schemes are about to get a lot more popular.
Century 21 New Zealand owner