First-home buyers have little to cheer about

KiwiBuild was a predictable line of attack for National leader Judith Collins in the first TVNZ leaders’ debate – so obvious, in fact, that Jacinda Ardern told reporters ahead of the debate that she had expected to be ‘peppered’ with the word.

During the debate, Ardern said she was happy to defend her government’s record on housing. ‘‘I do think things like the foreign buyer ban made a difference; we can see by the amount of first-time home buyers who are now in the market.’’

The ban she’s talking about was introduced in August 2018, to prevent offshore buyers without citizenship from purchasing homes. Has it made a difference though? And how much credit can Labour take for additional first-home buyers in the market?

Stats NZ’s property transfer statistics show only 591 houses were sold to foreign buyers in the year to June 2020 – or 0.4 per cent of all houses sold.

That’s a decline of 85 per cent since 2018, when just over 4000 sales were to foreign buyers.

Ardern is right that there are more first-home buyers in the market. They now make up about 11.5 per cent of new mortgages, compared to 8 per cent when the Labour-led government was elected.

However, this was a continuation of a trend that predated Labour’s election and there was no significant upswing following the 2017 election, or the foreign buyers ban in August

2018.

About half of all firsthome buyers over the past year received the

First Home Grant of either $5000 for a pre-existing property or $10,000 for a new build.

Although the grant has been rebranded, it is essentially an entrenchment of the HomeStart grant introduced by the previous National-led government.

Labour’s flagship housing policy, KiwiBuild, took a huge political beating from National after it failed to even come close to its initial targets of 16,000 houses in the first term of government and 100,000 houses in a decade.

The targets were dropped as part of a policy ‘reset’ and progress has remained slow: 548 KiwiBuild houses have been completed since June 2018 and another 977 are under construction.

Many of the KiwiBuild houses are part of larger developments that include properties for sale to the general market.

Labour has argued that without KiwiBuild, these developments would not have gone ahead.

To be generous, then, a further 1419 properties have been completed for market sale and another 458 are being built. Add those to the KiwiBuild properties and the total houses that have been built or are under construction, that may or may not have been built without KiwiBuild, is 3402.

It’s not nothing – but beyond those few houses, there’s little else that Labour can take credit for.

– The Whole Truth is a Stuff factchecking project