The Government is considering raising the amount that can be borrowed under its no-deposit Welcome Home loans to make it a more realistic option for Auckland's first-home buyers.
Housing Minister Maryan Street said lifting Welcome Home loan thresholds might help buyers in Auckland, where the current $280,000 maximum
loan under the scheme was not enough.
On current thresholds, those buying homes in the Government's own affordable housing development in Hobsonville will be unable to get Welcome Home loans. The houses are expected to cost about $350,000 - $70,000 more than the maximum $280,000 amount available under the loan scheme.
National Party housing spokesman Phil Heatley said:
"Labour is doing it because they've failed to meet the test of affordability even in their own housing scheme at Hobsonville and so to cover this up they are allowing people to borrow more and put themselves at risk at a time when interest rates are going through the roof. It's totally irresponsible."
The loan is designed for those who can afford to pay a mortgage but are struggling to raise the deposit. First-home buyers earning less than $85,000 can get no-deposit loans for up to $200,000 and up to $280,000 if they pay 15 per cent of the amount over $200,000.
Ms Street said "Welcome Home loans revisited" and shared equity were ways to deliver help where it was most needed.
Cabinet papers on housing affordability estimated only 2 per cent of single people who are renting and 26 per cent of couples can afford to service a mortgage on even the cheapest homes in their area without paying more than 30 per cent of their income.
In Auckland, the figures were worse, with only 6 per cent of renting couples able to afford the mortgage on a house in the lower quartile.
Further decisions on both the loan scheme and a new shared equity scheme are expected mid-year.
Ms Street said in Auckland it might have to be restricted to those buying newly built homes, to help drive supply of housing. However, it was possible it would provide shared equity in existing homes in areas where there was no housing shortage.
