Century 21 New Zealand’s national manager Geoff Barnett, has called for the 20% deposit requirement for first-home buyers to be “scrapped for lower valued properties”.
The agency’s comments follow the REINZ’s call last week
for a review on LVR restrictions and Barfoot and Thompson director Peter Thompson’s remarks at the beginning of the month also to exempt FHBs from the 20% deposit requirement.
Barnett says as prices are now cooling, Wellington officials need to review the suite of measures still in place two years on since being introduced.
“I agree with Peter Thompson that many first-home buyers should be exempt from the blanket high deposit requirements,” he says.
“They should still pay a deposit and their savings history and ability to service the mortgage must still be heavily scrutinised, but it’s time they got a fairer go.
“We’ve got young couples in Auckland earning a quarter of a million dollars between them, who could easily service a mortgage but because of high rents and living costs, they struggle to save a big deposit. It’s over $200,000 in deposit just to buy the average Auckland home!”
At the beginning of August, Thompson told the NZ Herald
it was in talks with the Government and Reserve Bank over proposing to nationwide exemption for first home buyers from the 20% deposit requirement, applicable only to owner-occupiers, not investors and for properties priced below $600,000 .
However Barnett says in Auckland the threshold should be a higher one of $750,000.
“The reality is if the noose was slightly loosened for first-home buyers, many would opt to buy simply because with relatively low interest rates, servicing a mortgage will be comparative to renting if not cheaper.”
With the market cooling and the difficulty Kiwis are having entering the housing market, Barnett says he wants to hear more from politicians this election on their views on the current restrictions.
“The Opportunities Party’s policy is to effectively keep all rental properties rentals in perpetuity and not be sold without the existing tenants as part of the package.
“This would only curb future investors and developers, stunting the country’s rental stock, and putting further pressure on rents. I’m all for giving tenants security but there are better ways of doing it.”