11,850 HomeStart grants to support Canterbury

Housing Minister Dr Nick Smith and Associate Housing Minister Paula Bennett today released the Ministry of Business, Innovation and Employment’s estimates of the number of first home buyers in Canterbury who are to benefit from the Government’s new KiwiSaver HomeStart package.

“We are making great progress in Canterbury with the residential rebuild, with a record 380 houses being built a month – an all-time record and more than treble the historic average of 100 homes a month. KiwiSaver HomeStart will complement other initiatives by helping young people get together the deposit and loan for their first home, and encouraging more homes to be built in an affordable range,” Dr Smith says.

The existing KiwiSaver First Home Deposit Subsidy will be replaced with the KiwiSaver HomeStart on 1 April 2015, with widened eligibility and double the support for buying a new home. The house price caps have also been increased. The number of grants will more than treble from 612 per year to 2370 per year.

“Under HomeStart, a couple in Canterbury each earning $50,000 a year will be able to withdraw $35,000 from their KiwiSaver and qualify for a HomeStart grant of $20,000 – giving them $55,000 for a deposit towards a new home with no other savings. They will also be eligible the expanded Welcome Home Loans scheme, which requires only a 10 per cent deposit, meaning they will be able to purchase a home up to a value of $450,000,” Dr Smith says.

“The second chance component of HomeStart will be particularly important for Canterbury where there are people who have lost their equity in their home in the extraordinary circumstances of the earthquakes. A non-first home buyer who may not have been insured, who may have been underinsured or through some other extraordinary circumstances have ended up with no home and little equity will be able to receive a HomeStart grant. To qualify, their equity needs to be less than 20 per cent of the new house price cap of $450,000 – so $90,000.

“HomeStart builds on the Government’s housing reforms that earlier this year introduced big changes for social housing,” Social Development Minister Paula Bennett says.

“Community Housing Providers can now offer income related rents, people can apply for social housing through Work and Income offices, and there’s new financial assistance to help people whose circumstances have improved to move on from social housing into the private rental market.

“We’re committed to growing the housing market so more New Zealanders can access affordable homes.”

“This new HomeStart scheme will help the Government’s efforts to support the rebuild of Canterbury’s housing and will ensure a higher level of home ownership in the new rebuilt city. It is also the next logical step in our ongoing programme of work to improve housing supply and affordability,” Dr Smith says.

“We are already freeing up more land supply, reducing building material costs, reining in infrastructure and compliance costs and investing in sector skills and productivity.”

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