"Developers will probably try harder to get their product below that $550,000 point," he said.
Real Estate Institute figures put the median house price in Auckland last month at $624,500. The median was above $550,000 in all sub-regional areas except Waitakere, where the median was exactly $550,000, and "outer Auckland", with a median of $542,500.
National's proposed policy aims to boost the supply of new houses by doubling the grants for first-home-buying couples who both have been in KiwiSaver for at least five years from $5000 to $10,000 a person, or from $10,000 to $20,000 for each couple.
The income limits for the grants are unchanged at $80,000 for a single buyer or $120,000 for a couple, but the house price caps would be lifted in all regions.
Watch: Election 2014: Nats to woo first-home buyers
First-home buyers would also be able to withdraw their government tax credits as well as their own and their employers' contributions to KiwiSaver since they started saving.
National estimates that the new rules could roughly double the numbers eligible for KiwiSaver first home grants from just under 12,000 a year under current rules to 23,200 a year by 2018-19.
Poised to benefit
A Weymouth couple fit the target group for extra help for first home buyers - but the mother still plans to go back to work just six weeks after having the couple's second baby to keep a roof over their heads.
Lisa, 25, a teacher, and Wirihana, 23, a port stevedore, hosted Prime Minister John Key yesterday in the four-bedroom house in the new Waimahia Inlet development that they will move into on September 19, the day before the election.
They will initially pay rent of $470 a week to the NZ Housing Foundation, but their rent will change into mortgage payments over the next five years under the foundation's Home Saver rent-to-buy scheme.
Their combined income is just under $90,000 a year, close to the Auckland household average of $95,100, both have paid into KiwiSaver since it started, and they both plan to withdraw their KiwiSaver savings and use the new higher Government grants to pay a deposit on the house, which is valued at $447,000, after the new subsidy rates come into force next April.
But Lisa will still have to go back to work fulltime six weeks after their second child is due in November. "What I would get [otherwise] wouldn't be enough to cover mortgage repayments or the rent," she said.
The couple has calculated that their deposit will reduce their payments from $470 to just under $400 a week once they start paying the mortgage, thanks to the proposed new rules.
"There is no way that anyone of our age with our income would be able to buy a house in Auckland if it wasn't for this scheme," Lisa said.
Missed out
Steven Kerr and Kelly Chang have missed out on extra subsidies for new home buyers because they have signed up to buy a house too soon.
The couple, both aged 32, agreed to buy a five-bedroom house in the new Waimahia Inlet development at Weymouth for $498,000.
Mr Kerr, a technician in the agricultural industry, has been in KiwiSaver for five years but did not pay in for two years when he was studying, so he is not sure whether he will qualify for any Government grant as a first-home buyer. Ms Chang, a warehouse dispatcher, has only just joined KiwiSaver and would not qualify for a grant for three years.
"It's pretty hard to find a house under $550,000," Mr Kerr said. The couple had saved about 13 to 15 per cent of the house price as a deposit.
"I think we are a loser based on the fact that we are paying over $485,000 [the current house price cap for first- home grants in Auckland]."
What $550,000 will buy ...
$549,000
Colwill Rd, Massey
Detached house, 3 bedrooms, floor area 122sq m, land area 350sq m.
$535,000
Red Hill Rd, Papakura
Detached house, 3 bedrooms, floor area 120sq m, land area 706sq m.
$525,000
Eskdale Rd, Birkenhead
Attached townhouse, 3 bedrooms, floor area 100sq m.
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