Comprehensive coverage of Budget 2022 with analysis from NZ Herald journalists and experts detailing what it means for Kiwis. Video / NZ Herald
KEY POINTS: • First-home grant house price caps jump, by as much as $275,000. • Covid industry support package modified to fund affordable housing.
For aspiring first-home buyers, price and income caps will now be reviewed every six months.
House price caps will be removed entirely from the first-home-loan application process.
Housing Minister Megan Woods said the changes could help thousands more first-home buyers, with enough funding for about 7000 extra first-home grants and 2500 more first-home loans available every year.
First-home grants are available for single buyers who earn up to $95,000 a year, or for joint buyers or single buyers with one or more dependents earning up to $150,000.
The Kāinga Whenua loan cap will jump from $200,000 to $500,000 to provide more options for people buying a home on Māori land, Woods added.
Green Party co-leader Marama Davidson welcomed some Budget 2022 housing announcements but said much more needed to be done, including for renters. Photo / Mark Mitchell
The Government will also support some not-for-profit groups with funds to deliver affordable homes.
Woods said the grants worth $50 million would deliver affordable rental housing in Auckland, Tauranga, Rotorua, Napier-Hastings, Wellington and Nelson-Tasman.
Last weekend, National Party deputy leader Nicola Willis called on the Government to work more with community providers to deliver housing.
Willis said for too long, the Government had allocated funds to a monolithic Kāinga Ora.
In today's Budget, the Government said $1 billion was needed to help existing and planned public and transitional housing through rent subsidies and rising operational costs.
The first-home grant price cap in Auckland will rise from $700,000 to $875,000. In Wellington and Queenstown-Lakes, the new cap will be even higher at $925,000.
The Hamilton urban cap rises from $600,000 to $725,000. In Tauranga, the old cap was also $600,000 but now it will be $875,000.
In Christchurch, the cap will rise from $550,000 to $750,000.
Single people with dependants can now earn up to $150,000 and still be eligible for a first-home grant.
Relocatable homes with a code of compliance issued in the past year will qualify as properties under the new model.
A construction sector support fund announced in response to Covid-19 and worth $350 million will now be repurposed, with $200 million of that fund redirected to grants for more affordable housing.
The Affordable Housing Fund will also set aside money for low-interest loans.
Green Party co-leader Marama Davidson welcomed the changes but said much more needed to be done.
"The Greens right now would have also flipped some support to people who rent, who are over half of the population.
"We wanted to see rent controls to really stop the increase in rents we are seeing right now," she added.
"Landlords are hiking up rents in between tenancies without any bit of extra improvement to that property whatsoever but simply because someone has moved out and the housing market is quite sick at the moment."
Te Pāti Māori co-leader Rawiri Waititi welcomed the increase to the Kāinga Whenua loan cap.
"Any house being built on Māori land is a good start for us. In that particular space there've been homes going up, in Tairāwhiti, we know there's programmes going up in Taranaki, in the north and also in Hauraki," he said.
"That good, but like I said, we've waited 182 years. Like Moana Jackson said, our issue is not homelessness, it's houselessness.
"It's got to be a total package. If we make up 50 per cent of the total waiting list for social housing, we should get 50 per cent of the stock."
The Act Party said the Budget initiatives on first-home grants and loans meant the Government was pumping an extra $148 million into an already inflated housing market.
"Financial support is likely to increase prices when supply is constrained," Act's deputy leader and housing spokeswoman Brooke van Velden said.
She said Labour had a legacy of underachievement in housing, and today's announcement was more flawed policy from the party that created KiwiBuild.
"The Budget increase to the First-Home Grants and First-Home Loans is an admission that this Government has pushed up house prices and they're now pouring more fuel on the fire."
