New package to help Kiwi first home buyers

Residential real estate in New Zealand has a median price of $420,000, according to September figures from the Real Estate Institute of New Zealand (REINZ). While this might not seem like much to many experienced buyers or investors, this figure can be a hard goal to reach for many first home buyers.

In Auckland, the median price is even higher at $570,000, making it harder for keen first home buyers to secure their first home.

Fortunately, a new scheme has been proposed which might help new purchasers get their foot in the door.

Aid on the way for new buyers

Before the general election this year, the government announced an initiative to provide first home buyers with the help they need to buy houses for sale.

The government estimates that 90,000 low and middle-income earners across the country will be able to take advantage of this scheme.

In the proposal, the government outlined a plan to replace the KiwiSaver First Home Deposit subsidy with the new KiwiSaver HomeStart Grant. This will double the support for new buyers seeking a first home purchase. At the same time, the price limits for eligible properties will also see a boost.

Auckland first home buyers will be able to use the HomeStart Grant for properties up to $550,000, while Wellingtonians and Cantabrians can buy homes priced up to $450,000.

Not only would this scheme allow more Kiwis into homes, but there is hope that it will encourage more affordable homes into the New Zealand property market.

First home buyers in New Zealand

REINZ data from September has shown a general trend of low first home buyer activity across the country. In the Manawatu and Wanganui regions, first home buyers "remain largely on the sidelines" due to more activity from investors, REINZ chief executive Helen O'Sullivan noted.

A similar sight was also observed in Taranaki, Central Otago Lakes and Northland. Interestingly, Canterbury/Westland, Waikato, Bay of Plenty, and Nelson/Marlborough have all experienced a big pickup in activity from first home buyers in recent months.

Commenting on the Canterbury/Westland region, Ms O'Sullivan said the market has certainly picked up since the election. More people are attending open homes and auctions are quickly becoming a hot method of sale.

"Auctions remain one of the best selling methods in the region, with an increasing number of vendors seeking auction sales to take advantage of buyer demand," she noted.