Derryn Mayne, owner of Century 21 New Zealand, has commended the government for its housing reset which could help renters get into their first homes.
“It’s great to see that the KiwiSaver HomeStart and Welcome Home Loan schemes are getting a shot in the arm. Best of all, this move doesn’t need any new bureaucracy or bricks and mortar,” Mayne said.
She added that amending the existing schemes already available for Kiwi first-home buyers will undoubtedly deliver some quick and easy wins.
“We have existing Government-backed schemes that are working, but they just needed to be made more attractive to enable more renters to get on the property ladder. Introducing more flexible rules as well as dropping the required deposits in both schemes to five percent goes a long way to achieving that,” she explained.
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According to Statistics New Zealand, the number of new dwellings consented nationwide was the highest since 1974.
With interest rates now as low as 3.55%, Mayne pointed out that many tenants paying sky-high rents could easily service a mortgage instead. However, high living costs might prevent them from saving for a deposit.
“I accept that overall housing supply is currently an issue, but let’s not forget that there are actually a lot of new houses coming down the pipeline. The problem for most first-home buyers is not housing availability but stumping up a deposit, which in many cases can be six figures,” Mayne said.
She also believes that Reserve Bank’s deposit requirements are still too tough, thanks to its 2013 loan-to-value ratio policy.
Meanwhile, Australia will adopt New Zealand’s Welcome Home Loan scheme next year, in which a first-home buyer’s deposit shortfall can be underwritten by the government.
“In turn, it’s great that our assistance to first-home buyers is starting to look more attractive and more flexible. For the past two decades Australia’s successful First Home Owner Grant scheme has been far superior to New Zealand’s offering. Now our schemes are about to get a lot more popular,” Mayne concluded.