There seem to be very few cheap options left for getting into the housing market in Tauranga.

As we reported last week, house values in even the traditionally less desirable parts of the city like Parkvale have skyrocketed in the last year - up 29.6 per cent.

While it remains the cheapest suburb based on the average value calculated by QV, it only makes things tougher for those trying to buy their first home.

On page 5 today, Carmen Hall reports the average cost of a house and land package has increased by $170,000 according to some in the building industry.


There goes the option of a relatively cheap group home.

The Government has come up with numerous initiatives to help first-home buyers out but they are not keeping up with demand.

One of those initiatives is the Home Start Grant. First-home buyers who have been contributing to KiwiSaver for five years can get a grant of $5000 to help them buy an existing house or $10,000 to build new.

Whether you are buying or building, the maximum the house can cost to be eligible for the grant in Tauranga is $450,000.

Last week we reported the average value of Tauranga properties sold in February was $565,547 and in today's story, Venture Developments director Mark Fraser-Jones said it was getting difficult to produce a house and land package for $450,000 or less.

When my husband and I were looking to buy our first home last year we gave up on the hope of being eligible for the grant because we struggled to find properties that were within the price bracket and others I know have had the same problem.

It almost makes the grant a joke. There will be so few people in Tauranga who are eligible for it, it is not really helping combat the rapidly increasing cost of a house.

The same is true in Auckland - the cap for the Home Start Grant is $550,000 there but there is still very little you can buy for that amount.

I understand the idea is to help people into a basic first home not a huge waterfront mansion but I still think the caps need to be reviewed.

In places like Auckland and Tauranga where house values have gone up so much in the last year, the cap needs to be increased otherwise it's no good to anyone.