Smith lauds Nats' housing boost
Housing Minister Nick Smith believes Nelson and Tasman first home buyers qualifying for assistance will be able to cope with big mortgages.
First-home buyers are being wooed with election sweeteners after National promised to double the size of taxpayer grants to help them into newly built homes.
KiwiSaver rules will also be loosened to further swell first-home buyer deposits, in what National is hoping will be a circuit breaker after a torrid couple of weeks.
Smith, who is also Nelson's MP, said today it would triple the number to 400 a year in Nelson and Tasman taking up the first home deposit withdrawal subsidy to be renamed HomeStart. It would start from April 1 next year.
Over five years 2000 people would be eligible for the Homestart grant of up to $10,000 for an individual or $20,000 for a couple. To qualify an individual needs to earn less than $80,000 a year or $120,000 for a couple.
Under the existing scheme they had to buy a house costing less than $350,000 but under the new scheme they could buy a house up to $450,000.
Smith said the complaints he had received about the scheme was that it was hard to find a suitable house in Nelson and Richmond for under $350,000.
It is also proposed to give more access through KiwiSaver allowing a further $500 a year which for a couple would mean another $5000, he said.
A couple earning $40,000 each, in KiwiSaver for five years, would be able to withdraw $29,000, and the Government would give them $20,000 under Home Start. That would give them a $49,000 deposit, they would be eligible for a Welcome Home loan which only requires a 10 per cent deposit and they could go into the marketplace to buy a house up to $450,00.
The cost of that would be $10 million of Home Start grants going into the Nelson region over five years, he said.
For the home buyer it could mean a $400,000 mortgage.
Smith said: "I think everybody who has struggled to buy their first home is overwhelmed by their first mortgage but would never have regretted taking the challenge on. They would much rather pay off a mortgage than rent and get on the first rung of the housing market.
"It's always been hard, particularly the way house prices have moved in the last 10 years, but we believe these new HomeStart
grants is what is needed to give young families the start needed to get their first home."
National says 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 a quarter, or 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.
Both Labour and National are under pressure to give young people a lift on to the property ladder, as they are whacked by rising interest rates and a Reserve Bank clampdown on low deposits.
Labour has also targeted first-home buyers with its promise to build 100,000 affordable houses. Leader David Cunliffe said yesterday Labour saw no merit in National's plan and would scrap the proposal if it won power on September 20. "There's nothing in this that will build a single house."
The Nelson Mail