The Government’s KiwiSaver HomeStart scheme, launched two years ago, is continuing to grow, with an increasing proportion of buyers opting for new property, Building and Construction Minister Dr Nick Smith says in welcoming the latest Housing New Zealand Financial Products Quarterly Report.
“KiwiSaver HomeStart is the most generous government support for first home buyers in more than a generation, providing grants of up to $10,000 for an existing home and $20,000 for a new one. It is complemented by enabling first home buyers to access their KiwiSaver funds and a government guarantee for bank loans, called a Welcome Home loan. The support provided for all three programmes in year two (1 April 2016-31 March 2017) has grown strongly over year one (April 1 2015-31 March 2016).
“KiwiSaver HomeStart helped 11,943 first home buyers in year one with $55.6 million of grants. In year two it helped a further 15,038 first home buyers with $72.9m in grants. This growth in assistance is welcome as the most difficult hurdle for first home buyers is pulling together the funds for a deposit. The scheme is forecast to grow to around $100 million next year and is on target to help 90,000 first home buyers with $435 million in grants over five years, as announced in 2015.
“It is also welcome news that the value and proportion of the HomeStart grants being used for new home purchases is growing. In year one, $9.35m was used for new homes, or 17 per cent. In year two, $15.7m was used for new homes, or 22 per cent. This reflects the strong growth in new homes coming on to the market and the Government making access to the scheme easier for new home buyers.
“I also welcome the trebling in the use of KiwiSaver funds for purchasing a home over the past three years. We have seen the level of withdrawals grow from $201m in the year to March 2015 prior to HomeStart, to $457m in the year to March 2016, to $627m in the year to March 2017. These numbers show how KiwiSaver is becoming an increasingly important part of the solution for getting young people into home ownership. I strongly encourage young New Zealanders to join KiwiSaver as a smart medium-term strategy for home ownership.
“The Welcome Home Loan scheme enables people with a deposit of just 10 per cent to access a bank mortgage through a government guarantee. These loans are also exempt from the Reserve Bank’s LVR limits. This report shows growth in these loans from 1053 in year one to 1218 in year two, growth of 16 per cent.
“This report shows the Government’s KiwiSaver HomeStart initiative is successfully helping New Zealanders into home ownership, with 27,000 people receiving grants totalling $128m and $1084m being accessed from KiwiSaver accounts for home ownership. This positive report, alongside the strong growth in home building activity and stabilisation in house prices, shows the Government’s housing policies are working.”