“At long last!” Say the First Home Buyers

First Home Buyer’s Boost

There’s nothing like a special government announcement of a Sunday that has a direct impact on your own profession or industry on the following Monday. I have to say, I did like the announcement – it was in regards to the KiwiSaver Home Start Grant for First Home Buyers. Firstly, they have raised the income caps, so more people are eligible to apply for the Home Start Grant (so long as you meet all the other criteria too). Secondly, they have increased the house price caps. Nothing outrageous there, I can’t see any million dollar Auckland Mansions being approved with a Home Start Grant! The housing price cap increase isn’t outrageous by any stretch, and is still in line with what’s happening in the market, as well as not being too out of reach for first home buyers.

And the Myths are out there already:

It’s just as well I don’t listen to talk back radio, or give much credence to an unnamed Auckland based newspaper, whose ‘Journalists’ wind me up on a regular basis. So let’s deal with the myths, to which I suspect have come from either one of those sources already:

1. People will be approved home lending for a home they cannot afford:

Highly unlikely. Potential home loan candidates who are using their home start grant, will still need to meet the bank’s or lending institution’s servicing criteria. Most banks and lenders have recently tighten up their servicing requirements and also subscribe to the Responsible Lending Code – meaning that if you really can’t afford that home loan, no amount of begging or ‘nice letters to the Bank Manager’ will get you that home loan.

2. It’s all about Auckland!

No it’s not. While the Auckland situation cannot be ignored, and perhaps the cogs behind this latest decision from the Government are based in the Auckland situation, the positive impacts will probably be felt in the rest of New Zealand first and foremost. It could mean that someone struggling to find a home under the old price cap, may actually be able to find one in the new price cap. Sometimes all that’s needed to make the difference between ‘missing out’ or ‘yay, we have a home!’ is $20,000.00.

But like all the new announcements, good, bad or otherwise, it’s a ‘let’s wait and see’ scenario. I’ll be reading keenly all the predictions from the country’s Economists. It is fair to say it’s a tricky situation New Zealand finds itself in, and I don’t think there really is one economic tool, decision or policy that will turn the housing crisis around. But I do know that our communities do work together to try and help our First Home Buyer’s into a home, everything from Landlords helping tenants, Employers helping employees, parents helping children and families helping each other out. And that’s the one thing that makes me proud to be a Kiwi: that our number eight wire mentality is well used when it comes to Home Ownership.