The Housing Minister this week announced a number of changes to the Homestart Grant and the Welcome Home Loan to come into effect on the 1st of October.
To summarise here are the key points of the Minister's press release:
- The minimum deposit requirement for the First Home Grant will reduce to 5% for both new and existing homes (currently the minimum deposit is 10%)
- The First Home Grant can be paid to all buyers, who are eligible for the grant, where there are three or more buyers, by removing the current cap of $10,000 for existing houses or $20,000 for new properties.
- The minimum deposit requirement for First Home Loan will reduce to 5% for both new and existing properties
- Occupation rules for owners of studio and one-bedroom apartments is reduced to one year.
- The definition for new properties for First Home Grants will be amended to define new properties as properties where the Building Code Compliance Certificate was issued less than twelve months before the date of the first home buyer’s First Home Grant application (currently this is six months).
$400 million is said to be made available to support more New Zealanders into homeownership by increasing support for progressive ownership schemes.
A progressive home ownership scheme can help to address both the deposit barrier and mortgage servicing, helping households who have been priced out of the market. These households may be unable to raise a sufficient deposit and/or finance to purchase a home outright.
Build to rent is an emerging model in New Zealand and the government will look at how it can be incorporated within the Government Build Programme.
If you have any questions, feel free to contact me.