May 27, 2022 10:20:05 AM

Big Changes and More Opportunities for First Home Buyers

Topics: Mortgage Advisers, First Home Buyer, Home Loan Rates 0

In its latest budget (May 2022), the New Zealand Government announced a raft of changes that would help more first home buyers get into their own homes. In addition to house price caps being removed from the Government's First Home Loan scheme, and the introduction of a single earner with dependent category, the First Home Grant house price caps are also increasing to be more aligned with lower quartile market values for new and existing properties. Here’s more on what first home buyers can expect.

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A kickstart for more first home buyers

The number of homes being sold to first home buyers has hit a 4.5 year low, with a significant number of Kiwis having to rely on the bank of mum and dad to get onto the property ladder. The latest budget announcement could be just the kickstart that many first home buyers have been waiting for.

Below is an outline of the schemes available for access by eligible first home buyers, including the latest changes:

First Home Grant

Provided you’ve been contributing to KiwiSaver for at least three years, you may be eligible to receive up to $10,000 per applicant under the First Home Grant to use towards buying a new build or existing home, up to the value of the house price caps in your region. From 19 May 2022, house price caps will increase as follows:

 

Region

Current House Price Cap

New House Price Cap

Auckland region

NZ$ 700,000

NZ$ 875,000

Hamilton Urban Area

NZ$ 600,000

NZ$ 725,000

Tauranga Urban Area

NZ$ 600,000

NZ$ 875,000

Wellington Urban Area

NZ$ 650,000

NZ$ 925,000

Christchurch Urban Area

NZ$ 550,000

NZ$ 750,000

Queenstown-Lakes District

NZ$ 650,000

NZ$ 925,000

Rest of New Zealand

NZ$ 500,000

From NZ$ 500,000 - $925,000

Other changes to the First Home Grant scheme include:

  • KiwiSaver contribution requirements adjusted, to reduce the threshold amount of regular savings to access the grant.
  • New income cap category introduced for ‘individual buyers with dependents’, with an income cap of $150,000.
  • Relocatable homes that have received a Code Compliance Certificate in the last 12 months can qualify as new properties.
  • Members of eligible Progressive Home Ownership rent-to-buy schemes can access the grant amount for new builds. 

First Home Loan

The First Home Loan scheme has been designed to help eligible first home buyers buy a first home with just 5 per cent deposit. From 1 June 2022, house price caps will be removed altogether (income caps and lender requirements still apply), to provide applicants with a greater choice of properties.

Another important change to the First Home Loan is the introduction of a new income cap category for ‘individual buyers with dependents’, with an income cap of $150,000, which will be available for eligible single parents to access.

Buy your first home

The changes to eligibility criteria – including the removal and increase of house price caps – is likely to help thousands more first home buyers buy their own home. As always though, having someone on your side to help guide you through the home buying process can make all the difference.

A mortgage adviser not only acts as guide by providing expert advice at every step of the home buying journey, but will also take away the stress and hassle of putting together a solid application, helping you find the right lender, and then structuring your home loan so that it fits your lifestyle and budget.

Get in touch with a Mortgage Express branded adviser today if you’d like advice about buying a first home.