“KiwiSaver HomeStart is about helping first home buyers pull together a deposit with a grant of up to $10,000 for an existing house and $20,000 for a new home. We are adjusting the income and house price caps to take into account increases in both since the scheme was announced so as to ensure it achieves its objective of helping middle income earners into a modest home.
“The income caps will increase tomorrow from $80,000 to $85,000 for a single person and from $120,000 to $130,000 for a couple.
“The house price caps are being increased from the existing $350,000, $450,000 and $550,000 depending on region to $400,000, $500,000 and $600,000 for an existing home, and to $450,000, $550,000 and $650,000 for a new home.
“This reflects the $50,000 increase in the national median house price since the scheme began. We are deliberately increasing the cap for new homes by an additional $50,000 to help drive growth in new residential construction.
“The 1 August house caps of $600,000 existing/$650,000 new apply to Auckland, the $500,000 existing/$550,000 new applies to those areas gazetted in the HASHA legislation (Wellington, Christchurch, Hamilton, Tauranga, Queenstown and Nelson-Tasman), and the $400,000 existing/$450,000 new to the other areas of New Zealand.
“These increases in the income and house price caps will also be applied to the Welcome Home loans. These loans enable first home buyers to buy with a 10 per cent deposit and because they are government guaranteed are exempt from the loan-to-value (LVR) ratio limits from the Reserve Bank.
“A couple who are each on the average income of $60,000 will, after five years in KiwiSaver, now be able to withdraw $45,000 from their KiwiSaver accounts and obtain a HomeStart grant of $20,000 if they’re buying a new build. With this $65,000 deposit, they may be eligible for a Welcome Home Loan, which requires only a 10 per cent deposit, enabling them to be in the market for a new home of up to $650,000.
“These changes are about deliberately screwing the scrum in the housing market in favour of first home buyers. These HomeStart and Welcome Home loan changes help first home buyers by giving them a cash grant for a deposit, while the Reserve Bank’s capital LVR changes, effective from 1 September, make it harder for low equity housing investors.
“KiwiSaver HomeStart and the Welcome Home Loan Scheme are just part of the Government’s comprehensive plan to meet New Zealand’s housing challenge. We are reforming New Zealand’s planning system and building laws, investing in record numbers of apprenticeships, supporting councils with infrastructure costs and directly building homes through the Crown land housing programme.
“It is the combination of these measures that over the long term will improve home ownership and ensure New Zealand has the quantity and quality of homes to meet the needs of a growing population.”