First-time home buyers struggling to scrape together a deposit may soon be given a lending hand through changes to the KiwiSaver scheme.
Housing Minister Nick Smith yesterday told TVNZ's Q + A programme that the Government was looking into raising the household and income thresholds for those in Kiwisaver schemes.
This would likely result in more people being eligible for the scheme's first-home deposit subsidy.
Currently, individuals or couples are eligible only if their annual income is less than $100,000.
Prospective property prices must also not exceed $400,000 in Auckland and Wellington city, and $300,000 in other parts of New Zealand.
Dr Smith told Q + A he was already reviewing the KiwiSaver scheme's income and threshold caps for first-time home buyers.
"I'm worried that the income household thresholds have not been shifted for some years," he said.
Aucklanders in particular found it difficult to access the start-up help for Kiwisaver because the price cap subsidy was restricted to houses $400,000 or less.
"I'm having a fresh look at that. I think it is important that those levels are realistic and need to respond to some of the changes that have occurred in the market," Dr Smith said.
A crackdown on "high-risk" loans for home owners is expected to be announced later this year - with the Reserve Bank warning restrictions would be slapped on banks approving high loan-to-value ratio lending if they did not pull back.
Dr Smith said if KiwiSaver helped get people's deposit amounts built up, the Reserve Bank governor would be comforted by the fact that there were fewer risky mortgages of 95 to 100 per cent.
Labour rejected Dr Smith's suggested changes, saying first-time home buyers were unlikely to find relief until the Government addressed "booming house prices".
Restrictions on high loan-to-value ration lending were likely to hit first-time homebuyers by raising the required deposit amounts, Mr Twyford said.
As a result of the restriction, banks will probably raise the minimum deposit.
This would likely require first-time buyers to meet a deposit of 20 per cent, adding $60,000 on to the initial cost of an average home, he said.
First home-buyers were being "hit at every turn," said Mr Twyford.
"They face hefty minimum deposits, forcing them to crack open their retirement savings or turn to loan sharks."APNZ