Major banks are queuing up to lend money to a lucky first 18 buyers of KiwiBuild homes.

All the main banks offered mobile mortgage lending at the first KiwiBuild "open homes" in the McLennan development in Papakura over the weekend before a ballot to choose the first home buyers opened today.

Peter Thompson of Barfoot and Thompson, which is marketing the first 18 KiwiBuild homes in the development, said about 550 people attended the open homes - 350 on Saturday and 200 on Sunday.

Agent Chris Grantham, who was on the spot, said he had never seen as many people turn out for any other release of new homes.

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"We've never been so busy, to be honest," he said.

"We had all the mobile facilities out there, all five banks were there. They were talking to a lot of people and people were asking questions."

Two banks, Kiwibank and ASB Bank, have unveiled cash inducements of $2000 and $2500 respectively for first home buyers to borrow money to buy KiwiBuild homes.

Kiwibank said last month it would lend up to 90 per cent of the value of KiwiBuild homes, in line with Reserve Bank limits for new homes.

ASB said on Friday it would lend up to 95 per cent on KiwiBuild homes.

Housing Minister Phil Twyford said 42,000 people had now registered with KiwiBuild - the first step in a process which requires next seeking pre-approval for a home loan from a mortgage lender, and then entering a ballot when homes come on the market.

The first 19 KiwiBuild homes are being balloted in the McLennan development (above) near the Papakura army camp. Photo / File
The first 19 KiwiBuild homes are being balloted in the McLennan development (above) near the Papakura army camp. Photo / File

The first ballot for the 18 McLennan homes, priced at $579,000 for a three-bedroom home and $649,000 for a four-bedroom home, closes on October 5.

Loan Market mortgage broker Bruce Patten said all main banks had now agreed to lend on KiwiBuild homes, despite initial concerns about buyers being required to live in the homes for at least three years.

"They were not happy with the wording of the contracts initially," he said. "There was a three-year time frame when, if you sell, you have to sell at the original price. Some of the banks didn't like that clause."

But a spokeswoman for Twyford said that was a misunderstanding.

"They were never going to be sold at purchase price. That was a suggestion that came from some commentator/punter," she said.

"The banks were initially concerned about the requirement that people have to hold on to them for three years but they have been reassured because the KiwiBuild Unit can give discretion to those with a change in circumstance (death, divorce etc) to sell their house within the three years."

A Cabinet paper says that when approval is given to sell within three years, "any capital gains will go to the owner".

The first KiwiBuild homes in the McLennan development (above) are priced at $579,000 for three bedrooms and $649,000 for four bedrooms. Photo / McLennan
The first KiwiBuild homes in the McLennan development (above) are priced at $579,000 for three bedrooms and $649,000 for four bedrooms. Photo / McLennan

Patten said banks were still sticking to tough requirements about home buyers' ability to service mortgages. He said it was no longer enough to show that mortgage payments would be less than 30 per cent of the buyers' incomes, as banks now wanted to look at what buyers could afford after accounting for all their other expenses.

But he said the banks now had funds available to lend to anyone who could afford to borrow.

"The banks went out and actually sought money offshore and in New Zealand, and now they have quite an abundance of it, so they now are trying to get it out the door," he said.

Apart from the Kiwibuild inducements offered by Kiwibank and ASB, SBS Bank is currently offering a $1000 cash bonus for any first home loan of up to 90 per cent of a home's value.

Kiwibank external communications manager Kara Tait said a Kiwibank's mobile mortgage managers at the Papakura open day "was approached by approximately 25 individuals and couples, looking or considering a pre-approval".

ASB acting general manager retail banking Claire McKinnon said ASB had "lots of interest in our KiwiBuild support package announced on Friday".

Housing Minister Phil Twyford explains how to get onto the affordable housing register. Video / Marty Melville

The country's biggest bank, ANZ, said it also had mobile mortgage managers at the Papakura open home and received "a good number of enquiries".

She said ANZ was also willing to lend up to 90 per cent of a home's value.

"ANZ's current policy allows us to lend up to 90 per cent, subject to customers meeting appropriate assessment of affordability and serviceability," she said.

"ANZ offers cash contributions to customers to support the cost of the housing transaction. The amount and conditions around the contributions are competitive with this part of the market."

Westpac spokesman Will Hines said Westpac "received some enquiries already, including at the open homes in Papakura at the weekend, and we're expecting mortgage applications for KiwiBuild homes to increase as more houses are built".

Westpac was one of several banks offering mortgages to KiwiBuild home buyers at the McLennan development in Papakura at the weekend. Photo / Supplied
Westpac was one of several banks offering mortgages to KiwiBuild home buyers at the McLennan development in Papakura at the weekend. Photo / Supplied

A Bank of New Zealand spokesman said BNZ "is prepared to lend to people with as little as a 5 per cent deposit, including to people looking to pre-qualify for KiwiBuild".

"It's important to note that every application is assessed on a case-by-case basis," he said.

Twyford said another 12 properties already under construction at the McLennan development would be completed before Christmas, including seven terraced two-bedroom homes and five four-bedroom homes. Next year a further 58 mainly three bedroom homes will be built at the Papakura location.

"This is just the beginning," he said. "Later this week our Government will be announcing the start of the next tranche of KiwiBuild homes – the first homes to be bought off the plans."

KiwiBuild: how to apply


• Check if you're eligible at www.kiwibuild.govt.nz

• Get proof of your income from Inland Revenue and proof of NZ citizenship or residence.

• Apply to mortgage lender for pre-approval of home loan.

• Sign statutory declaration that you will live in the house and not sell within three years.

• Register on KiwiBuild website for pre-qualification.

• Enter ballot for homes when they become available.