Further help in Budget for first-home buyers

It is good news for potential first-home buyers.

In yesterday’s Budget, Housing Minister Dr Megan Woods announced the house price caps for the First Home Grants would be increasing in many parts of the country.

The First Home Loan cap in Dunedin has been lifted to $500,000. PHOTO: GERARD O’BRIEN

As house prices increased last year, many potential home buyers were caught out as prices moved past the grants’ cap.

The Government also removed caps entirely for the First Home Loan to provide greater choice of homes for buyers, Dr Woods said.

She estimated the changes would provide about 7000 extra grants and 2500 home loans each year.

In Dunedin, the previous cap for the grant on existing homes was $425,000. That has been increased to $500,000.

For new builds in the city, the cap has increased to $675,000, up from $550,000.

In the Queenstown-Lakes district, the existing homes cap has increased from $600,000 to $875,000, while the cap for new builds increased from $650,000 to $925,000.

In other areas, such as Southland and the West Coast, existing home caps would now float between $400,000 and $875,000.

New builds floated from $500,000 to $925,000.

The house price income caps would now be reviewed every six months to make sure they continued to stay up to date.

Dr Woods also announced the Affordable Housing Fund, aimed at supporting the development of new affordable homes for low- to moderate-income families in areas facing the biggest housing supply challenges.

The fund, which had $350million committed to it, would leverage partnerships with investors, philanthropic organisations, developers, and the affordable housing sector.

"Construction costs are making it harder for many of our providers to deliver affordable housing."

The fund would "bridge the gap" for organisations to get new rental accommodation built, Dr Woods said.