UPDATED: 7:23am – A bigger HomeStart grant won’t help many first time buyers in Auckland because there aren’t enough affordable homes in the city, a mortgage broker says.
The National Party is promising to increase financial assistance to people buying their first house by increasing the HomeStart grant by $10,000.
That brings the grant to $20,000 for those buying an existing home and to $30,000 for those building a new home.
But there was a catch. To be eligible, Auckland buyers had to snap up an existing home for less than $600,000, or $650,000 for a new build.
Combined with the government Welcome Home Loans, which required a 10 percent deposit, and KiwiSaver withdrawals the increased grant would provide “significant support” for first time buyers, given 18 percent of home sales in the city in the past year sold for less than the $600,000 price cap, National’s housing spokesperson Nick Smith said.
However, that sales figure was “misleading” because it included managed apartments and sections, Loan Market mortgage advisor Bruce Patten said.
“In reality the number of affordable homes sold would be less than 10 percent. “That means there’ll be a big percentage of the market that won’t be able to unlock these grants,” he said.
Areas that did have homes for less than $600,000 were likely to be in the cheaper, lower socio-economic areas in the outer suburbs such as Manuwera and Tuakau in South Auckland, or the “odd place in West Auckland.”
It would be better to increase the Auckland price cap to $800,000, Mr Patten said. In the last two quarters only 10 percent of HomeStart grants paid out went to first time buyers in Auckland.
Housing New Zealand figures show 511 homes were bought or built in Auckland with grants totalling $4.1 million between October 2016 and March. That compares with $39.4m of grants paid to 6000 homes nationwide.
Between January and March this year, a total of 2606 grants for homes and new builds were given nationwide totalling $17.2m.
Christchurch consumed the biggest chunk, where 364 properties were bought or built with grants totalling $2.4m
Auckland was in second place with 224 homes bought or built with grants worth $1.8m during the quarter.
In the last three months of 2016, $22.1m in grants were paid out, including $2.3m in Auckland that went towards 287 properties.
-RNZ
