National's lure for first-home buyers

TRACY WATKINS
Last updated 05:00 25/08/2014
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Cash-strapped first-home buyers are shaping as the big winners of the election campaign, as National weighed in with its housing sweetener.

It promised to double the size of taxpayer grants to help them into newly-built homes, following Labour's promise to build 100,000 affordable houses.

National's housing promise - delivered at a rally in Labour's heartland territory of Manukau yesterday - targets young couples on low to middle incomes in high-cost housing areas including Auckland, Wellington and Christchurch.

It is an attempt to persuade developers to build the sort of "nappy valley"-style developments of the 1960s and 70s that used to give first-home buyers a start on the property ladder.

Housing Minister Nick Smith said 35 per cent of homes built in the 1970s were at the lower end of the price scale and catered to first-home buyers.

As land prices have soared, developers have increasingly targeted higher-end buyers, meaning just 5 per cent of new homes now fall into the affordable home bracket.

"The focus of this package is to increase the supply of new housing and to encourage housing companies to build homes in a price range affordable for first-home buyers," Smith said.

But Labour leader David Cunliffe said there was no merit in National's plan and Labour would scrap the proposal if it won power on September 20.

"There's nothing in this that will build a single house."

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National proposes to loosen KiwiSaver rules to further swell first-home buyer deposits.

National said that under the scheme, a qualifying couple on an annual income of about $50,000 each could put together a deposit of about $55,000 after five years in KiwiSaver, including a $20,000 HomeStart grant. That's double the existing grant to couples of up to $10,000.

It said the changes, which are an extension of the existing KiwiSaver deposit subsidy scheme, will help an extra 40,000 people into their first home, and boost the supply of cheaper housing.

But officials expect only about 10,000 first-home buyers to qualify for the full cash grant, and there are limits both on qualifying income and the price of the house.

Prime Minister John Key unveiled National's housing policy in front of a 2500-strong crowd, one of the biggest political rallies in decades.

The campaign launch, beginning the four-week countdown to the election on September 20, was a show of strength after National was forced on to the back foot by Nicky Hager's allegations, in the book Dirty Politics, of political smear campaigns and links between Key's Beehive office and shock-jock blogger Cameron Slater.

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NATS' HOUSING PLAN

Replace the KiwiSaver first-home deposit subsidy with a KiwiSaver HomeStart grant, doubling the support for buying a new home from $3000 to $6000, if in KiwiSaver for three years, $8000 after four years and $10,000 after five years.

Expand eligibility for Welcome Home loans, setting house price caps at $550,000 in Auckland, $450,000 in Wellington and Christchurch, and $350,000 elsewhere.

The income caps for both schemes would be $80,000 for an individual, or $120,000 for a couple.

KiwiSaver members can withdraw all their savings (except the $1000 kickstart) to go towards a first home.

Proposals to cost $218m over five years and take effect on April 1. National estimates it would get an extra 40,000 into their first home.

- The Dominion Post

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