24 September 2019
Real Estate Is KiwiBuild for me?
Unless you’re a first home buyer, you probably haven’t noticed the term ‘KiwiBuild’ being thrown around, but it’s the buzzword of the moment. Media outlets are going crazy over the announcement of the embattled programme’s reset, so we decided to explore what KiwiBuild is, who it effects, and why you should be interested in this Government initiative.
KiwiBuild is a real estate programme introduced in 2018, with the aim of building 100,000 houses by 2028 to increase housing affordability in New Zealand. Targeted at first home buyers and second chancers who are entering/re-entering the market, the programme nicely works in with the other government initiatives, such as Kiwisaver's HomeStart grant.
Described by political commentators as ‘ambitious’, it captured the heart and soul of a nation. Why? Because owning your own home has always been the Kiwi-dream (preferably on a quarter acre section). The initiative has been found to have a major flaw – the middle-income buyers the homes were billed for, were still unable to afford them.
KiwiBuild Reset September 2019
Changes have been announced as an attempt to reset KiwiBuild, mainly with first home buyers. So, what are they?
- Government backed deposits for first home buyers reduced to five per cent from ten per cent.
- Progressive home ownership schemes, where the Government has set aside $400 million to help more people get into their own homes, through shared equity, or shared ownership (where a third party owns part of the property), or rent-to-buy opportunities.
- Limit of earnings removed from First Home Buyers Grants, so multiple buyers can combine grants and purchase together.
- KiwiBuild has scrapped their 100,000 home goal, with no new target set.
- Studio and one-bedroom homeowners only need to commit to owning the home for one year versus the three years previously required.
- The Government underwrite has been reduced. If KiwiBuild homes fail to sell within the first 60 days, they can be placed on the open market.
What does this mean for home buyers?
With lower deposits and the potential opportunities to get a foot in the door through progressive home ownership schemes, KiwiBuild is set to help first home buyers onto the ladder. However, the there has been no comment on how they will manage the needs in the size of homes and how this translates to affordability.
To KiwiBuild or not to KiwiBuild
It’s important for all potential homeowners to look at all the options available to make an educated decision when purchasing a property. If you’re looking at houses closer to the Hamilton area, but also suitable for first home buyers, contact the team at Lugtons today to discuss available homes to suit your budget.