Govt scraps KiwiBuild target, lowers deposit requirement

Buyers will now have access to government assistance with a 5% deposit

Govt scraps KiwiBuild target, lowers deposit requirement

The government has admitted that the KiwiBuild scheme “isn’t working,” and has announced a series of new initiatives to address the housing crisis.

Housing Minister Megan Woods says the government’s KiwiBuild ‘reset’ will include more shared ownership schemes, building more homes in higher-demand areas, and most importantly, reducing the deposit required for a government-backed mortgage from 10% to 5%.

The target of building 100,000 new homes over ten years has also been scrapped, with Minister Woods saying it was “overly ambitious” and focused in areas where there was little homebuyer demand.

“Instead of the target, we will focus on building as many homes as we can, as fast as we can in the right places,” Woods said. “Each month we will release a dashboard of housing statistics so New Zealanders can easily measure our progress.

“Homes in Te Kauwhata, Canterbury and Wanaka that haven’t sold will be released to the open market, allowing us to reuse the government capital to get more developments underway where there is clear demand.”

REINZ chief executive Bindi Norwell has since welcomed the announced changes, and says the lowered deposit requirement will go a long way to helping first-home buyers achieve their home ownership goals. Woods acknowledged that saving for a deposit is no longer achievable for many New Zealanders, and as a result, an increasing proportion of the country has been locked out of the property market.

“Saving for that initial deposit is often the biggest hurdle to getting on the property ladder,” Norwell said.

“The 5% deposit for Government backed deposits means that Queenstown-Lakes is now the only area in the country where the deposit required to purchase a median priced home would be in excess of $50,000.”

“It is fantastic to see the Government has considered a number of new options, including allowing family and friends to combine their $10,000 First Home Grants and their KiwiSaver to purchase a home together,” she concluded. “Purchasing a home with friends and family appears to be becoming a more common option for individuals who cannot viably do it alone.”

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