October 1 changes to help first home buyers

Press Release – New Zealand Government

Hon Dr Nick Smith
Minister of Housing

30 September 2013 Media Statement
October 1 changes to help first home buyers

Changes to KiwiSaver and Welcome Home Loans which take effect tomorrow will help first home buyers get into the market, Housing Minister Dr Nick Smith says.

“The changes will help thousands of families with their deposit for their first home and provide a guarantee for their mortgage. The changes will increase eligibility for the schemes, doubling the amount of home buyers receiving the deposit subsidy from 4,700 to 10,000 a year, and trebling the number of Welcome Home Loans available from 845 to 2,500 a year,” he says.

“The changes are needed to make the schemes realistic and fair and ensure Government assistance is targeted at families on modest incomes buying modest homes.

“These changes are particularly significant for Auckland and Christchurch, where the unrealistic house price caps are severely restricting access to the two schemes.

“The $64 million dollar package to support first home buyers, announced in August, includes new regional house price caps and income caps for the two schemes to better reflect today’s market conditions.

“We are also aligning the minimum deposit thresholds of the two schemes to 10 per cent to support the Reserve Bank’s concerns about banks providing too many high loan-to-value ratio loans which threaten the financial stability of the economy. It is also reasonable to expect first home buyers to have saved some funds before getting taxpayer support to buy a home.”

The new regional house price caps for both the KiwiSaver first home deposit subsidy and Welcome Home Loan are $485,000 in Auckland, $425,000 in Wellington City and Queenstown Lakes, $400,000 in Christchurch City and Selwyn District, $350,000 in Thames/Coromandel, Tauranga City, Western Bay of Plenty, Hamilton City, Kapiti Coast, Porirua City, Hutt City, Upper Hutt, Tasman/Nelson, and Waimakariri, and $300,000 for the rest of New Zealand.
The new annual income limits for both schemes are $80,000 before tax for a single person and $120,000 before tax for two or more buyers.

“These changes are just part of the Government’s package of reforms to make housing more affordable. We are tackling the root causes of housing affordability including freeing up land supply, scrutinising building material costs, reforming the RMA, reigning in council development contributions, investing in skills, and cutting compliance costs,” Dr Smith says.

Housing New Zealand, who administers the subsidy and underwrites Welcome Home Loans, has produced a new brochure to show how first home buyers can combine a KiwiSaver deposit subsidy, their KiwiSaver savings and a Welcome Home Loan to buy a home more easily. It is available from http://www.my-first-home.co.nz/ along with more information, case studies and other helpful resources.

ENDS

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