Prime Minister John Key has kicked off National's
election campaign in South Auckland with a boost to Government
assistance for low and middle income first-time buyers.
Grants under the Kiwisaver First home deposit Subsidy will be
doubled for newly-built homes, the house-price limits
increased and scheme renamed as the Kiwisaver Homestart
At present eligible first-home buyers can get a grant of
$3000 after three years in Kiwisaver, $4000 after four years
and $5000 after five years.
Under the Homestart changes, those grants will be increased
to $6000, $8000 and $10,000 respectively for new builds.
Mr Key said that was expected to double the number receiving
a grant from 10,000 to 20,000.
House price limits for Homestart and Welcome Home Loans will
be $550,000 in Auckland (currently $485,000) , $450,000 in
Wellington, Christchurch, and similar markets ($425,000 at
present) and $350,000 for the rest of the country ($300,000
Mr Key told reporters afterwards he had informed the Treasury
and the Reserve Bank what National was promising.
While he could not speak for the Reserve Bank, he believed it
was "comfortable" with it because it was designed to increase
the supply of new houses.
"What we know by simple economics is that if we go out there
and ensure that the demand for these homes at affordable
homes can be filled, actually the building companies around
New Zealand will actually meet that demand by building a
product, most likely building them in the special housing
Mr Key said the new policy was a powerful message for a first
home buyer, enabling them to get a much bigger deposit to
qualify for a Welcome Home Loan which is guaranteed by the
Government and which is exempt from the LVR ratios imposed by
the Reserve Bank to slow the rate of house inflation.
Two other measures are part of the package: enabling
Kiwisaver first-home withdrawals to include the member's tax
credit, meaning they can withdraw all of their savings except
the $1000 kick-start; and expanding eligibility for Welcome
Home Loans by aligning the house price caps with the
Kiwisaver Homestart grant.
Mr Key said the changes were expected to help 40,000 more
people over five years than under current policy, and 90,000
Housing Minister Nick Smith said a couple in Auckland each
earning $50,000 who had contributed to Kiwisaver for five
years would be able to withdraw $35,000 and receive a $20,000
Kiwisaver Homestart Grant, making a $55,000 deposit.
And because the Welcome Home Loan Scheme allowed a 10 per
cent deposit, the would be able to buy a home up to $550,000
The income caps for eligibility for HomeStart and Welcome
Home Loans will remain at $80,000 for a single buyer and
$120,000 for a couple.
Mr Key got a rapturous welcome from the 2500-strong crowd,
taking five minutes to make his way to the stage and 10
minutes to leave.
The entire caucus joined him on stage, including Justice
Minister Judith Collins who made just her second public
appearance since the publication of Nicky Hager's book
Dirty Politics in which she has a starring role.
At a press conference after his speech, Mr Key refused to
entertain any more questions about the book.
Asked if he thought she should apologise to the public
servant who faced death threats after she passed on details
to Cameron Slater who accused him of leaking information
damaging to the Government, he said: "To be honest I think
those issues are pretty well traversed. We had a good chew on
them over the last 10 days and we are here to talk about
housing... you should feel free to talk about them but I am
not going to."