KiwiBuild criteria needs to accommodate low-income earners

The KiwiBuild eligibility criteria looks "relatively robust" but some modification is needed, says REINZ

KiwiBuild criteria needs to accommodate low-income earners

The government has officially revealed the KiwiBuild eligibility criteria, and over a thousand people have registered their interest in the scheme within the first two hours.

Housing and Urban Development Minister Phil Twyford has announced that KiwiBuild homes are for aspiring first home owner-occupiers who are currently locked out of the market. In order to qualify, applicants must be a first-home buyer or in a similar financial position, i.e. no longer own a home and meet the asset test that applies to the KiwiSaver HomeStart grant. These ‘second chance’ buyers cannot have assets over 20% of the house price cap for existing properties in their area.

All applicants must also intend to live in the home for a minimum of three years, and have a household income of no more than $120,000 for single purchasers and $180,000 for multiple purchasers.

“We know that New Zealanders at and below these incomes are struggling to buy a home, especially in high demand areas such as Auckland and Queenstown,” said Twyford. “A decade ago many families would have been able to afford a home, but they are now locked out of the market.”

The houses will be allocated by ballot due to high demand, and Twyford has suggested that preference may be given to buyers who already live in an area where KiwiBuild houses are being developed. KiwiBuild owners will be able to rent out their spare rooms, so long as they remain living on the property.

The Real Estate Institute of New Zealand (REINZ) has since welcomed the announcement, saying the criteria looks “relatively robust.”

“Today’s announcement will give thousands of New Zealanders hope that one day they may actually be able to afford a home that they can call their own,” said REINZ chief executive Bindi Norwell. “With home ownership at its lowest point in 60 years, the KiwiBuild programme will help many young people and those on lower incomes to get a foot on the property ladder.”

Norwell says the $180,000 couples’ threshold is “surprisingly high,” but that it nonetheless means that more people will be eligible to apply for a KiwiBuild property than originally anticipated.

“One modification we would like to see, however, is a percentage of the properties to be allocated to low income earners,” Norwell stated. “This would ensure that those who really need it most, for example a single parent working two part-time jobs to support their family, will have a higher chance of having their name pulled out of the ballot than a single person earning $120,000.”

Prospective buyers are encouraged to register their interest in KiwiBuild via MBIE’s website.

 

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