Urgent changes are needed to give first home buyers in Nelson and Tasman a fairer go in our overheated property market.
The hardest part of buying a first home today is pulling together a deposit. Getting a deposit will get harder next Monday with the Government’s banking rules requiring bigger deposits.
The First Home Scheme I set up as Building and Housing Minister helps by giving a government grant of up to $20,000 for a deposit on a home and enables people to use all their Kiwisaver funds. The grant is limited to purchasing a modest home with a price cap set in Nelson and Tasman at $500,000 for an existing home and $550,000 for a new home.
The scheme has been working well with 2500 people since 2015 in Nelson and Tasman buying a first home using the grant. But last year house prices soared 20% or $100,000 to a median of $720,000. There are very few homes below the price caps and numbers accessing the scheme plummeted. It is nonsensical that government support locally reduced 30% last year, resulting in an underspend of $800,000 at a time when it has never been tougher to be a first home buyer.
Politics is getting in the way of a sensible fix. Labour criticised Nationals home deposit grant saying Kiwibuild was a much better answer. History has proved this wrong with 80,000 New Zealanders helped into home ownership through the First Home Scheme and only 500 through Kiwibuild. There has not been one Kiwibuild house built in Nelson / Tasman despite Labours pledge of 1000 homes.
Nelson and Tasman first home buyers urgently need access to the First Home grant scheme to fund a deposit. The house price cap needs fixing to realistic levels of about $700,000. It is just part of the housing solution but needs doing now.
