First-time home buyers in the regions seem more likely to
benefit from a policy announced by Prime Minister John Key,
still leaving some in high price areas to struggle on finding
their mortgage deposit.
Mr Key announced several changes to the ways first-time
buyers could get into the market at the party's campaign
But figures from QV and realestate.co.nz showed those wanting
to buy in Auckland, Christchurch, Queenstown and other hot
spots could still struggle to come up with a deposit.
In places such as Dunedin, Invercargill, the West Coast and
Marlborough, under the new policy - due to come into force on
April 1 if National is re-elected on September 20 -
first-home buyers would be substantially better off in
meeting criteria for securing a mortgage.
Mr Key said the changes were projected to help about 90,000
lower and middle income first-home buyers over the next five
years, 40,000 more than would be helped under current
The policy would help tens of thousands more first-home
buyers achieve their dream of home ownership.
''It will get young families started building what for most
will be their biggest asset.
''National backs young Kiwis who are disciplined, save up and
want to put a deposit down on a house.
"National values home ownership because it provides stability
for families, strength for communities and security in
First-home buyers had always found it hard and often the
first step was quite a stretch, he said.
That was why Mr Key believed the changes would be welcomed by
potential first-home buyers.
There were three major changes.
The KiwiSaver first home deposit subsidy would be replaced
with a KiwiSaver HomeStart grant.
This was a similar scheme but had higher house price limits
and doubled the support for people buying or building a new
People would be allowed to withdraw more money from their
KiwiSaver account to use as a deposit on their first home.
First-home buyers would be allowed to withdraw the
Government's annual contribution to their account - the
member's tax credit of up to $521 a year - as well as their
own, and their employer's contributions.
More people would be eligible for Welcome Home loans which
meant they required only a 10% deposit to get a
The new policy would cost $218 million over the next five
''The existing limits simply don't reflect the prices
first-home buyers face when they're trying to get into the
market,'' Mr Key said.
In Auckland, the house price limit would be raised from
$485,000 to $550,000.
QV figures had the average Auckland house price at about
$750,000 and realestate.co.nz figures had an average asking
price in Auckland of $708,809 in July.
Other areas with relatively high house prices - such as
Hamilton, Tauranga, the Wellington region, Nelson,
Christchurch and Queenstown - would have a new threshold of
Nelson's average house price last month was $401,579,
Christchurch's price was $461,176 and Queenstown-Lakes
district's average price was $676,230.
The threshold for the rest of the country would rise to
Dunedin's average price last month was $290,658 and
Invercargill's price was $207,492.
The Central Otago district's average price was $321,721.
Labour leader David Cunliffe said the announcement was a
Band-Aid approach that would push up prices rather than solve
the housing crisis.
''The fundamental problems are lack of supply of housing,
planning rules that constrict development, and unrestricted
''Unmet demand is driving house prices through the roof, and,
instead of addressing the fundamental problem, now National
wants to spend $218 million of taxpayers' money to fuel
demand even more. It will drive prices even higher.''
Green Party co-leader Russel Norman said National chucking a
few dollars at deposits did almost nothing to offset the
massive increase in the average house price.
''While first-home buyers will no doubt welcome any
additional support, it is a drop in the bucket.
"First-home buyers will still be over $220,000 behind where
they were in 2008 due to average price increases.''
At a glance
• National Party policy aims to help 90,000 people get a
HomeStart grant over the next five years, 40,000 more than
• House price limits for KiwiSaver HomeStart and Welcome Home
loans will be increased.
• Larger KiwiSaver first home withdrawals will be enabled.
• Eligibility for Welcome Home loans will be expanded.