The government, on August 1, announced important changes to the KiwiSaver HomeStart scheme to allow more New Zealanders to buy their first home. The changes include increasing income threshold and house price caps that will allow more Kiwis with low and middle income to access the government grants provided by the HomeStart scheme.
“From today (August 1), the house price limits have increased by $50,000 for existing homes and $100,000 for new build homes right across the country. People will also now be able to access the scheme if they earn below $85,000 a year as an individual or $130,000 as a couple,” Prime Minister John Key said in a statement announcing the changes.
The changes come as a part of National government’s comprehensive housing plan to improve housing affordability and will provide eligible New Zealanders with a grant of up to $20,000 per couple towards the deposit amount on their first home.
(Graphic: Indian Weekender)
While the National government believes that these changes will help more first home buyers get a foot on the property ladder, Opposition Leader Andrew Little says that the Housing Minister was forced to make the changes after the number of applications being declined or withdrawn trebled in the past year.
The Labour leader said that the Minister had no choice but to make these changes. He said that the scheme has been tailored to help it “keep up with skyrocketing Auckland house prices”.
“Nick Smith is going to have to keep raising the thresholds if National does nothing to build affordable houses in Auckland. It is now clear the Unitary Plan is not going to provide the affordable homes Aucklanders are so desperate for.”
According to the information obtained by Labour, the number of applications declined in Auckland has gone from 52 per quarter to 231 and that in Christchurch has gone from 22 declines per quarter to 113. For Wellington, the number has gone up from 9 to 59, Hamilton from 6 to 58 and Tauranga from 11 to 46.
The number of applications withdrawn or failed to go through has gone up from 65 to 327 in Auckland, from 28 to 163 in Christchurch, from 10 to 86 in Wellington, from 13 to 93 in Hamilton and from 13 to 70 in Tauranga.
Meanwhile, NZ First leader Winston Peters said that these changes are pointless and will make no difference as the market is far out of reach for the first-home buyers.
“Raising the income and price caps is just a complete waste of time. The whole purpose of the KiwiSaver scheme is supposed to be saving for retirement anyway,” Peters said.
He further said that most of the Kiwis are not earning enough money to even enter the required caps or be eligible.
“When you have very ordinary houses selling for close to $1 million in Auckland, the new price caps make it all pointless for the great bulk of first home buyers.”
He suggested that instead of “playing around the edges”, the government should put “an immediate cap on the immigration and present housing supply policies”.
According to independent QV data, around 30% of all house sales in Auckland during the first three months of 2016 were below the new Auckland HomeStart house price limits of $600,000 for existing homes, a statement from the Beehive said.
In its first year, this scheme helped around 12,000 New Zealanders across the country into their first home—not just in the main cities but also in the regions—and it’s expected to help around 90,000 people over five years.
In the next part of this series, we will discuss the issue further with the opinion of the housing experts and the potential first-home buyers. If you would like to share your views about how these changes will affect you, feel free to write to us before Tuesday, August 9, at reporter@indianweekender.co.nz.
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