Updating Home Start Grant Must Be Government Priority

Century 21 New Zealand is joining the Real Estate Institute of New Zealand (REINZ) and others calling for the Government to review the Home Start grant thresholds.

“It’s great Prime Minister Jacinda Ardern has confirmed the Government is looking at ways to help first-home buyers get into the property market. Updating the Home Start grant and making it fit for purpose ahead of real estate’s summer season must now be a priority for the new cabinet,” says Derryn Mayne, Owner of Century 21 New Zealand.

The subsidy scheme enables qualifying first-home buyers under certain income caps to receive a grant to purchase property under set regional house price caps. For example, Aucklanders must buy an existing property for $600,000 or less, or $650,000 for new builds. For the rest of the country, apart from Queenstown, it’s less.

“As well as lifting the price caps, I’d like to see the income thresholds lifted, and the grant itself lifted beyond $5,000 per person. All the numbers in and around Home Start need to be revised urgently, particularly as the market is set to only increase over the coming months. As it stands, every day, fewer and fewer properties and first-home buyers qualify, killing the Kiwi homeownership dream for many,” says Ms Mayne.

REINZ has revealed only one third of New Zealand properties are now below the price cap threshold, that’s down from 40% in June. In Auckland, only 12% of properties are now below the threshold.

“In Auckland, given the median house price is now $1 million, it’s increasingly impossible for first-home buyers to find an existing home for less than $600,000. In fact, you’d really struggle to even buy a two-bedroom grannie flat ‘do up’ in Manurewa for that!”

REINZ’s Monthly Property Report for October showed median house prices across New Zealand were up by 19.8%, compared to October 2019. In total, 10 regions around the country saw record median prices during October, including Auckland up by 16.3% in 12 months to new record high of $1 million.

“Given interest rates have never been cheaper, this could be the best chance young Kiwis have to buy a house and afford a mortgage. Let’s not pull up the ladder behind us. Rather, let’s get us many young people onto the housing ladder as possible.”

The Century 21 boss says those who come out of the global Covid-19 crisis with property will have a huge advantage going forward, and that has to be a big incentive for the Government to act sooner rather than later.

“The Prime Minister has made clear that she doesn’t want to see a country where only those whose parents can help will get into the housing market. The real estate industry wholeheartedly agrees. The housing market is moving at speed. Rather than leaving first-home buyers behind, New Zealand now needs to encourage and enable as many as we’re able. Let’s ensure homeownership makes a positive difference to many more lives,” says Derryn Mayne.

www.century21.co.nz

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