Housing New Zealand’s HomeStart grant and Welcome Home Loan house price caps for new builds in areas outside the main centres are increasing from $450,000 to $500,000 to match the KiwiBuild price cap, Housing and Urban Development Minister Phil Twyford announced today.
This means more first home buyers across New Zealand will be able to apply for a KiwiBuild home using the HomeStart grant and Welcome Home Loan.
“Aligning the price caps so they are the same as the KiwiBuild price caps across the country means first home buyers can take advantage of the grant and loan for KiwiBuild, if they meet the eligibility criteria,” Phil Twyford said.
The HomeStart Grant has already helped families get into their KiwiBuild home. For example, to buy one of the first KiwiBuild homes at McLennan, families could get a mortgage with a deposit of just 10 per cent, or $58,000. Up to $20,000 of that could come from the HomeStart Grant, meaning families only need $38,000 from their KiwiSaver or other savings.
Around 60 per cent of KiwiBuild buyers so far earn below the HomeStart and Welcome Home Loan income caps.
This change is expected to result in HomeStart grants being paid for an additional 230 homes per year and an additional 10 Welcome Home Loans being drawn per year.
The increase in the price cap for new builds applies to all areas of New Zealand outside of Auckland, Queenstown, Greater Wellington, Greater Christchurch, Hamilton, Greater Tauranga, and Nelson-Tasman. The HomeStart and Welcome Home Loan house price caps in these areas are already at or above the KiwiBuild caps.
“The cost of this increase is estimated to be around $3 million per year, which will be funded within the existing KiwiSaver Deposit subsidy and Housing New Zealand budgets,” Phil Twyford said.
“This increase is part of a Government review of home ownership products to better align with KiwiBuild, support more house building and help families own their own homes.”