Southlanders welcome home loan scheme most

01:43, Jan 31 2009

The Government's Welcome Home Loan Scheme has had its biggest uptake in Southland as people struggling to raise a deposit strive for home ownership.

Professor Bob Hargreaves, of Massey University's finance, banking and property department, said that while the scheme positively assisted first-home buyers into the market, it could also be pushing up prices.

However, it was not the main factor behind what was driving Southland's property market, he said.

Growth in the number of dairy conversions happening in Southland also had a flow-on effect in terms of pushing up property prices.

Southland was also still in catch-up mode compared with other regions.

Housing New Zealand figures obtained by The Southland Times show Invercargill has had the most Welcome Home loans with 301, followed by Christchurch with 188, Dunedin with 125 and Rotorua with 101.

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The scheme aims to help low-income families with a good credit history to own their own homes despite having little or no deposit.

SBS senior banking consultant Christine Hollingworth said there had been a lot of interest in the scheme since the company became a lender a year ago. Mrs Hollingworth said most of the accepted Welcome Home loans were for 100 percent of the value of the property.

Registered valuer Robert Todd said the Welcome Home Loan scheme was certainly driving demand for housing in the $100,000 to $200,000 market and demand pushed up prices, He did not believe vendors would be increasing their asking price simply because they know a buyer was going through the scheme.

REINZ Invercargill vice-president Tony Jenkins also dismissed suggestions vendors put up prices if they know it's through a no-deposit scheme.

"Those people who have got 100 percent finance, they'll shop around to get the best value for their money as well. The vendors can't just put their price up ... it doesn't add up."

The Southland Times