The real estate industry is urging the government to review the thresholds for the Home Start grant following rapid rises in house prices across the country.
Over the last 12 months, median house prices have jumped by 20% – leaving only 33% of NZ properties below the threshold eligible for the Home Start grant, down from 40% in June.
Bindi Norwell, the chief executive of the Real Estate Institute of New Zealand (REINZ), said the Home Start grant could help first-home buyers to enter the property market. However, the government must still review the caps as house prices continue to rise, with Auckland’s median prices even hitting $1 million for the first time.
“If you’re in Queenstown-Lakes, Porirua City, or Wellington City, less than 10% of properties selling in the current market are below the local thresholds, making it extremely difficult for first-home buyers in these areas. It’s not much better in Auckland, Kapiti, or Hamilton with 12%, 13%, and 16% of properties respectively being eligible for a home start grant,” Norwell said.
Century 21 New Zealand owner Derryn Mayne commented that the government must prioritise updating the grant.
“It’s great Prime Minister Jacinda Ardern has confirmed the government is looking at ways to help first-home buyers get into the property market. Updating the Home Start grant and making it fit for purpose ahead of real estate’s summer season must now be a priority for the new cabinet,” Mayne said.
“As well as lifting the price caps, I’d like to see the income thresholds lifted and the grant itself lifted beyond $5,000 per person. All the numbers in and around Home Start need to be revised urgently, particularly as the market is set to only increase over the coming months. As it stands, every day, fewer and fewer properties and first-home buyers qualify, killing the Kiwi homeownership dream for many.”