Tinkering with housing

Housing Minister Nick Smith has announced another tweak to try and help people buying their first home in a market with escalating values.

Government raises KiwiSaver HomeStart caps

The Government is increasing the income and house price caps of the KiwiSaver HomeStart scheme to ensure it meets its objectives of helping New Zealanders buy their first home, Building and Housing Minister Dr Nick Smith says.

“KiwiSaver HomeStart is about helping first home buyers pull together a deposit with a grant of up to $10,000 for an existing house and $20,000 for a new home. We are adjusting the income and house price caps to take into account increases in both since the scheme was announced so as to ensure it achieves its objective of helping middle income earners into a modest home.

“The income caps will increase tomorrow from $80,000 to $85,000 for a single person and from $120,000 to $130,000 for a couple.

“The house price caps are being increased from the existing $350,000, $450,000 and $550,000 depending on region to $400,000, $500,000 and $600,000 for an existing home, and to $450,000, $550,000 and $650,000 for a new home.

“This reflects the $50,000 increase in the national median house price since the scheme began. We are deliberately increasing the cap for new homes by an additional $50,000 to help drive growth in new residential construction.

The aim:

“These changes are about deliberately screwing the scrum in the housing market in favour of first home buyers. These HomeStart and Welcome Home loan changes help first home buyers by giving them a cash grant for a deposit, while the Reserve Bank’s capital LVR changes, effective from 1 September, make it harder for low equity housing investors.

“KiwiSaver HomeStart and the Welcome Home Loan Scheme are just part of the Government’s comprehensive plan to meet New Zealand’s housing challenge. We are reforming New Zealand’s planning system and building laws, investing in record numbers of apprenticeships, supporting councils with infrastructure costs and directly building homes through the Crown land housing programme.

“It is the combination of these measures that over the long term will improve home ownership and ensure New Zealand has the quantity and quality of homes to meet the needs of a growing population.”

The Government has been trying hard to demonstrate that they have ‘a comprehensive plan’ to address the housing non-crisis. It is complex and every tweak may help a little.

But Labour continue to niggle away at a major National vulnerability with the help of  NewstalkZB which introduces KiwiSaver changes will provide plenty of opportunity for home ownership – Nick Smith with:

The Labour party says the National government’s left hand doesn’t know what the right’s doing when it comes to housing policy.

And after a brief description of the announcement:

But Labour’s housing spokesman Phil Twyford said it just tinkers with the margins of the problem, and may even make it worse by making more people borrow more money.

He said the market is on the brink of a crash and the government needs to crack down on market speculators.

He added over the last year only nine per cent of the grants made through the scheme went to Aucklanders – and yet Auckland accounts for a third of the population, and is the region in crisis.

And he said it comes just weeks after Prime Minister John Key pleaded with the Reserve Bank to tighten restrictions on low deposit lenders.

He said the Auckland housing market is on the brink of a crash and it doesn’t make sense for Nick Smith to increase subsidies on low deposit lending.

The tweak to Kiwisaver caps was never going to avert a crash.

Leave a comment

5 Comments

  1. Blazer

     /  1st August 2016

    NZH…April/June 2016…AUCKLAND
    16494 houses property transfers
    900 houses bought by non-residents (5.5%)
    – 495 bought by Chinese tax residents (3%)
    – 93 bought by people with mixed tax residency, including NZ (0.6%)
    – 69 bought by Australian tax residents (0.4%)
    – 33 bought by Singapore tax residents (0.2%)

    ‘Labour will ban non-resident purchases if in Government.’….worth voting for on that alone.

    Reply
  2. Blazer

     /  1st August 2016

    Between January last year and May this year, 1500 Auckland houses were bought and sold again. Nearly 100 were sold three times in those 17 months. Seven were sold four times and two five times in less than a year.

    These houses are unlikely to be housing anybody. The buyers might not have even visited them since the purchase. They stand empty, sometimes in pristine renovated condition, while their value rises – by an average $1600 a day over those 17 months. Every time they sell, the seller books the capital gain as equity that can be used to buy another house, and the churn continues.’NZH’

    Reply
  3. Blazer

     /  1st August 2016

    no crisis ,just a question of supply….say the Nats with their heads in the sand.

    And new monthly data now being released by the RBNZ show that around 40% of new mortgage borrowing is on an interest-only basis, with about 55% of money being borrowed by investors on interest-only.’NZH’.

    Reply
  4. Blazer

     /  2nd August 2016

    listened to Nick Smith on radio live…quite farcical,and ludicrous.Nats hoping to bat the reality away till after the elections.A poison pill for whoever wins.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s