A community group says even the top bracket of income earners eligible for the Government's HomeStart programme cannot afford a property in Auckland.

From today, the pricing cap on a house purchased under the scheme is now $600,000 to $650,000 in Auckland, and between $400,000 and $550,000 for the rest of the country.

But Community Housing Aotearoa director Scott Figenshow said a couple earning $130,000 a year can only afford the mortgage for a $400,000 house.

He said they'd like to see HomeStart work, but very few people have taken it up because it doesn't make housing affordable.


Labour's Phil Twyford agreed, he said over the last year only nine per cent of the grants made through the scheme went to Aucklanders - yet Auckland accounts for a third of the population.

Mr Figenshow said if government was serious about housing affordability it would have supported a mandatory requirement of the affordable housing provisions in Auckland's Unitary Plan.

He added that allowing people on slightly higher incomes to buy slightly more expensive houses adds to debt, and won't slow prices.

"Making the price of a house that one can purchase under the scheme higher, is still moving away from the internationally recognised affordability metrics."

Mr Figenshow said techniques need to be used to slow house price increases, and the Government's grant towards deposits should also be increased.

It's a different story from Building and Housing Minister Nick Smith, he said 25 percent of houses sold for the year to June were under the $600,000 mark, and that's there's plenty of houses available under the scheme.

Dr Smith said the increase of house price and income caps to allow more people into the scheme matches increases in pay rates and is an effort to drive growth in residential construction to lower demand of housing in Auckland.