Changes To KiwiBuild See Housing Targets Scrapped and Lower Deposits For First-Time Home Buyers
The New Zealand Government recently announced a host of new changes to the KiwiBuild scheme, including a five per cent drop in deposits for first-time home buyers.
KiwiBuild has been struggling for some time and delays in the new changes led to questions over whether or not the scheme had any long-term feasibility.
Labour’s highly ambitious promise that the scheme would build 100,000 homes has also been scrapped, with Housing Minister Megan Woods saying, “KiwiBuild isn’t working, so we’re changing it.”
Scrapping the 100,000 homes promise came after the scheme failed to deliver on its initial targets. In June of this year, just over 200 homes were completed under the scheme. The target? 1000 homes.
New changes will also make it easier for first time home buyers to purchase their own home. Government-backed deposits for first-time home buyers have been reduced from 10 per cent to only five per cent. In addition to this, $400 million has been reserved to fund a progressive home ownership plan that aims to allow more people to own the home they are living in, instead of being stuck in a renting cycle. A rent-to-buy programme will also mean that long-term renters can begin putting money towards a deposit on a house they can own.
“We will also be reducing the deposit required for a Government-backed mortgage to five per cent and changing policy settings so that family and friends can each use their $10,000 First Home Grant and their KiwiSavers to buy their first home together,” said Woods.
It is hoped that the new changes to the scheme will not only make it easier for first-time homeowners to purchase their first property but also incentivise developers to continue investing in the New Zealand property market.