Boost for Rotorua first home buyers

More than 270 first home buyers in Rotorua have been helped in the first year of the Government's HomeStart scheme.

Rotorua MP Todd McClay said the biggest challenge for young people getting into home ownership is pulling together funds for a deposit.

"The HomeStart scheme in its first year has provided $55.6 million in grants to 11,943 people to help them into their first home," he said.

"In Rotorua it helped 277 buyers with grants worth $1,201,000."

The $435 million HomeStart scheme, which came into effect on April 1 2015 to replace the KiwiSaver First Home Deposit Subsidy, has been projected to help 90,000 people over five years.

Under it, couples can apply for grants of up to $10,000 for a deposit on an existing home and up to $20,000 for a new-build.

"Now is a good time for families to buy a first home. Interest rates are at the lowest level for fifty years and the HomeStart scheme is the most generous support a government has offered for first home buyers in a generation," said Mr McClay.

"The HomeStart scheme is also another good reason for people to join up to KiwiSaver. Under it, a couple each earning $40,000 a year could withdraw up to $29,000 after five years for a house deposit. They can combine that with their HomeStart grant of $10,000 or $20,000."

Mr McClay also welcomed the government's latest tweaks to HomeStart which would help the scheme work better for second-chance homebuyers.

"It removes the income cap for people who have previously owned their own home but are struggling to get back into ownership after an event such as a separation or business failure."

"KiwiSaver HomeStart is part of the National-led Government's wide, ongoing programme to improve housing supply and affordability. The overall programme includes freeing up more land for development, measures to help constrain building material costs and compliance costs, and steps to raise the productivity performance of the construction sector."