National offers bigger grants for pricier homes
Nearly 12,000 first- or second-home buyers in Canterbury will have access to National's Homestart grant over the next five years, Housing Minister Nick Smith says.
Smith was in Christchurch today, along with social development minister Paula Bennett, to detail the Canterbury component of National party policy launched last weekend.
Smith said under Homestart, the grant for a first-time buyer building new in Canterbury would rise from $10,000 for a couple to $20,000. Property value limits that set eligibility for the grant would also increase around the region.
The price cap for properties eligible for Homestart in Christchurch and Selwyn would rise from $400,000 to $450,000, and from $350,000 to $450,000 in Waimakariri.
Christchurch last year had 539 homeowners taking a Kiwisaver grant, but the new Homestart scheme criteria could cater to 10,450 homeowners over the next five years, Smith said.
Waimakariri had 42 eligible homeowners last year, but a four-fold annual increase would take that to 800 over five years. This amounted to about 160 homeowners a year.
Selwyn had 31 grant recipients last year but that number could rise to 125 annually, or 600 over a five-year term.
Smith said it had become hard to find well-built, well-located new homes for $450,000 in a subdivision like Kaiapoi's Silverstream.
''There's no question, in my view, that Canterbury families are going to be able to have access to good-quality, realistic homes with that new house price limit of $450,000."
There would also be provision for ''second-chance'' homebuyers, Smith said.
''Let's say you're an earthquake victim that didn't have insurance, or you had insurance but you're under-insured . . . or you no longer own a home for whatever reason, providing your equity is less than 20 per cent of the new target [$90,000] you are able to have access to the Homestart scheme.''
People would be in this ''hard luck'' category for all sorts of reasons, Smith said. A marriage may have broken down, for example, forcing a house sale and leaving the owners short of a deposit on a new home.
Smith said National had a ''broader concern'' that too much new housing stock was in the expensive end of the range, putting homes out of first-timers' reach.
The new eligibility terms would give first homeowners a bigger deposit through the $20,000 Homestart grant, so house-builders would ''now be trying really hard'' to price below $450,000 to capture that market.
These buyers would also be eligible for a Welcome Home loan that was exempt from the Reserve Bank's loan to value ratio limit (LVR).
They would be able to raise a loan with a 10 per cent deposit rather than the 20 per cent required under LVR, Smith said.