PLANNING ON IT: Months ahead ideal for first-time home buyers

FOR FIRST home buyers the next few months are shaping up as a good time to buy. There are three good reasons.
Firstly, we are seeing a decline in property prices as winter sets in. Some property investors have reacted to the last Budget by choosing to sell, and this has had an impact at the lower end of the market.
Mortgage interest rates are expected to increase over the next few months and this will help keep property prices in check.
Secondly, from Thursday, July 1, you can you use some of your KiwiSaver funds for your house purchase, providing you meet certain criteria.
You must have been a member of KiwiSaver for at least three years and the house you buy must be one that you plan to live in yourself for at least six months.
You will be able to withdraw the contributions you have made to KiwiSaver, plus your employer contributions and investment returns.
As well, you may be eligible for a subsidy of $1000 for every year you have been a member of KiwiSaver, up to a maximum of $5000. To be eligible, your income and the value of the house you are buying must be within certain limits.
Thirdly, you may also be eligible for a low deposit loan through Housing New Zealand's Welcome Home Loan scheme.
With this scheme, you can borrow up to $200,000 without a deposit and up to $280,000 ($350,000 in some areas) with a 15 per cent deposit on the amount above $200,000. That means you can buy a $280,000 house with a deposit of $7500, and your KiwiSaver money (contributions plus subsidy) will count towards your deposit.
Now is definitely a good time for first home buyers.
Liz Koh is a financial adviser, based in Paraparaumu. Her disclosure statement can be obtained free of charge by calling: 0800 273 847. Author of Your Money Personality; Unlock the Secret to a Rich and Happy Life. She can be contacted on email: liz.koh@moneymax.co.nz or view: www.moneymax.co.nz