First home buyers in the provinces will be given a subsidy of
up to $20,000 to move into vacant state houses, Housing
Minister Nick Smith announced today.
The new FirstHome scheme would allow modest wage earners to
be gifted a 10 per cent deposit and give them priority to buy
empty homes no longer needed by Housing New Zealand.
To be eligible, a buyer would have to earn $53,000 or less
and commit to living in the house for a minimum of three
years. A couple would have to earn no more than $80,600.
Housing NZ would make a grant of 10 per cent of the
property's value, up to a maximum of $20,000.
Dr Smith said: "FirstHome will improve housing outcomes at
both ends of the affordability spectrum. It will help modest
income families in provincial New Zealand buy their first
"It will also free up capital from these surplus vacant
properties to invest in new state houses in high demand areas
like Auckland and Christchurch.''
The policy announcement comes as the Reserve Bank introduces
new lending restrictions which mean most people will need a
20 per cent deposit to purchase a home.
The restrictions have generated concern that first home
buyers could find it harder to get into the housing market.
Around 400 state houses would be put up for sale in total
under the new scheme - 100 in the next year. The largest
number of vacant properties were in Northland and the central
The first 41 homes would be available for purchase on Monday
in places such as Otorohonga and Invercargill, and had an
average value of $120,000.
Dr Smith said there was nothing unusual about selling off
state houses, noting that 1280 were sold under the previous
The Housing NZ properties were either the wrong size or in
the wrong location to meet demand.
The scheme was believed to be nearly cost-neutral, because
Housing NZ was making a loss on the vacant properties.
Dr Smith: "Housing NZ advises that with the high holding
costs of these properties with council rates, vandalism and
upkeep, the cost of the FirstHome grants will largely be
The Green Party said it welcomed policies which helped first
home buyers but said this one was expensive and "poorly
Co-leader Metiria Turei said that Government was selling
houses that it could not spare.
"Every region of New Zealand has families on the waiting list
for a state house. In the region where Dr Smith made his
announcement, 58 families are waiting for a state house.
"Those families should be the priority for vacant state
houses like the ones Dr Smith plans to sell.''
She said that policy would cost up to $6 million to help 500
people: "That's a poor use of public money.''