KiwiBuild reset should help first-home buyers – experts

Experts have said that KiwiBuild’s reset, which includes a plan to change the government’s entire building programme, should include more generous subsidies for first-home buyers.

In the coming months, the government is expected to deliver a new framework for the troubled construction scheme that was originally meant to deliver 100,000 affordable homes over 10 years. However, the scheme drew criticism over the slow pace of building, poor choices of areas for development, and HomeStart subsidy.

The scheme indicated that people who withdrew their KiwiSaver savings for a first-home deposit can qualify for a subsidy of up to $10,000 if they met house price and income caps. The house price cap in Auckland and Queenstown is $600,000 while that in other main centres is $500,000.

Bindi Norwell, chief executive at the Real Estate Institute, said that the figures were too low.

"With median house prices at record highs in many parts of the country, first-home buyers are still finding it extremely difficult to get a foot on the property ladder. In Auckland, the cap is $250,000 off the median price, whereas in Queenstown the cap is $345,000 below the median price showing how difficult it is in those parts of the country for first-time buyers," Norwell told Stuff.co.nz.

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It's important we get the balance right between how much people can borrow and allowing people to get on to the property market, but if there was some flexibility in the cap that would be beneficial, particularly as we expect median house prices to continue to rise in a number of regions in the short to medium term.”

Reserve Bank data showed that first-home buyers are an increasing part of the market as lending increased from $713 million two years ago to $926 million this year.