REINZ welcomes housing reset
All first home buyers, not just Kiwibuild buyers, will now only need a 5 per cent deposit to qualify for a government-backed First Home Loan, and First Home Grant worth up to $10,000.
Sweeping changes to the housing policy announced last week by Housing Minister Megan Woods included a reset of Kiwibuild, starting with the dumping of the target of 100,000 homes in 10 years.
‘‘We are clearing decks of what hasn’t worked,’’ Woods said.
‘‘This is about the government returning to its historic role of expanding opportunities via schemes backed by government funding to get Kiwis into homes, then help them service the mortgage.’’
Bindi Norwell, chief executive at Real Estate Institute of New Zealand says, ‘‘The issues with Kiwibuild have been well documented by critics over the last 12 months, however, what’s important now is to focus on the bigger picture and that is to fix the programme and to provide affordable housing for those who need it most, particularly as home ownership is at its lowest level in 60 years.’’
The reset includes a $400 million allocation for a progressive home ownership scheme that could include rent to buy and shared equity plans for up to 4000 families, with full details yet to be released.
Norwell says: ‘‘We welcome a number of the initiatives announced by Minister Woods, including the ‘progressive home ownership’ model which sees Government-backed deposits lowered from 10 per cent to 5 per cent.
‘‘This will significantly help a number of first-home buyers, as saving for that initial deposit was often the biggest hurdle to getting on the property ladder.’’
Kiwibuild buyers of studio and one-bedroom homes will be able to sell or rent their property after one year instead of three.
Groups of two or more people can now get together and each use their deposit assistance of up to $10,000 to buy their first home. These changes are expected to help multigenerational families who want to buy a first home.
‘‘It is fantastic to see the Government has considered a number of new options, including allowing family and friends to combine their $10,000 First Home Grants and their Kiwisaver to purchase a home together. Purchasing a home with friends and family appears to be becoming a more common option for individuals who cannot viably do it alone,’’ Norwell points out.
There are changes also to how Kiwibuild works, lowering the amount of the government underwrite provided to developers by increasing the incentive to sell to Kiwibuild buyers; when they don’t they will get less.
Norwell said, ‘‘Underpinning the whole initiative will be the importance of addressing issues such as red tape, speeding up of consents and the build process, using modern pre-fabrication building methodology and reducing the cost of build where possible.’’
Other changes include removing the asset test for ‘‘second chances’’ people who have had to sell their family home as a result of a divorce or a family breakup and have to start out again on their own. An income test will still apply. People who need to move to a much more expensive area for work will also be offered support.
Woods said they will measure the progress and allow New Zealanders to ‘‘hold us to account by releasing a new monthly housing dashboard showing all the key indicators of housing’’.
The minister said the changes should help people who would otherwise be locked out of the market, or work alongside those providers to design schemes backed by government funding that helps get Kiwis into homes and help them service the mortgage.
‘‘We look forward to further announcements in due course on shared equity models which could provide further opportunities to get people into housing more quickly,’’ Norwell said.