Removal of First Home Buyers Grant

Savings for a deposit

Impact of the Removal of First Home Buyer Grants in New Zealand

In a move that has sparked debates across the housing market and among prospective homeowners, New Zealand has decided to remove First Home Buyer (FHB) grants. These grants, which were aimed at helping first-time buyers enter the property market by providing financial assistance, have been a cornerstone of government policy for several years. The decision to eliminate them marks a significant shift in housing affordability strategies and has raised concerns among various stakeholders.

Understanding First Home Buyer Grants

First Home Buyer grants typically provided financial assistance in the form of subsidies or contributions towards a deposit for eligible individuals or households purchasing their first property. The grants were designed to ease the financial burden on first-time buyers, who often face challenges in saving enough for a deposit due to rising property prices and other economic factors.

Reasons Behind the Removal

The decision to remove First Home Buyer grants stems from several considerations:

1. Budgetary Constraints: Government budgets are under pressure from various sectors, and reallocating funds from FHB grants to other areas may be seen as a fiscal necessity.

2. Market Dynamics: There is a concern that FHB grants may contribute to inflated property prices by increasing demand without addressing the supply-side issues that drive affordability challenges.

3. Effectiveness: Some policymakers argue that FHB grants have not sufficiently improved housing affordability in the long term and that alternative policies may be more effective.

Impact on Prospective Homebuyers

The removal of First Home Buyer grants is expected to have several immediate and long-term impacts on prospective homebuyers:

- Increased Financial Burden: Without the grants, first-time buyers may find it more difficult to accumulate a sufficient deposit, thereby delaying their entry into the housing market.

- Market Accessibility: The removal could widen the gap between those who can afford to buy a home and those who cannot, potentially exacerbating socio-economic inequalities.

- Demand Shift: There might be a temporary decrease in demand from first-time buyers, which could impact market dynamics and property prices.

Response from Stakeholders

The announcement has elicited varied responses from stakeholders:

- Real Estate Industry: Some within the industry argue that removing FHB grants could dampen demand and adversely affect market liquidity.

- Consumer Advocates: Many consumer advocates express concern that the removal of grants could further marginalize first-time buyers and hinder efforts to achieve widespread homeownership.

- Government Officials: Officials defending the decision emphasize the need for more sustainable housing policies that address both demand and supply-side issues.

Future Considerations

As New Zealand adjusts to the removal of First Home Buyer grants, policymakers may explore alternative measures to support first-time buyers and promote housing affordability:

- Alternative Support Programs: Governments might introduce new initiatives such as subsidized rental schemes, rent-to-buy programs, or enhanced housing supply measures.

- Financial Education: Increasing financial literacy and support for savings programs could empower individuals to achieve homeownership goals without relying solely on grants.

- Market Monitoring: Continued monitoring of housing market trends and affordability metrics will be crucial in shaping future policy decisions.


The removal of First Home Buyer grants represents a significant policy shift in New Zealand's approach to housing affordability. While the immediate impact on prospective homeowners is clear, the long-term consequences will depend on how effectively alternative measures are implemented and their ability to address underlying housing market challenges. As the debate continues, stakeholders will closely watch developments to gauge the broader implications for housing accessibility and economic stability in New Zealand.