National launches key home buyers policy

  • 24/08/2014

Prime Minister John Key has sought to shake the allegations of Dirty Politics with a raft of major housing initiatives at National's campaign launch this afternoon.

More than 2500 of the party faithful arrived by the busload and packed the Vodafone Events Centre in south Auckland this afternoon.

Not a hint of Dirty Politics was to be seen inside the centre today, but a small number of protesters gathered outside.

The party has promised to change KiwiSaver to help more than 90,000 first-home buyers and young families get into their own homes.

Mr Key says the changes are estimated to help low- and middle-income first-home buyers over the next five years – more than 40,000 more than under current policies.

It is estimated to cost $218 million over the next five years and would take effect from April next year.

"National backs young Kiwis who are disciplined, save up and want to put a deposit down on a house. National values home ownership. That's because it provides stability for families, strength for communities and security in retirement," Mr Key says.

He says there is "no doubt" New Zealanders, and especially first-home buyers, will be more interested in National's housing policy rather than what was in Nicky Hager's book.

Mr Key would not answer questions about the conduct of Justice Minister Judith Collins in Dirty Politics and whether she should apologise to public servant Simon Pleasants after handing his personal information to Whale Oil blogger Cameron Slater, saying "we've had a good chew on the issues […] we're here to talk about housing".

The plan consists of three major changes. The first is replacing the KiwiSaver First Home Deposit Subsidy for the KiwiSaver HomeStart Grant, which brings with it higher house-price limits and doubles the support for people building and buying a new home.

The price limits will be $550,000 in Auckland, $450,000 in Wellington, Christchurch and other similarly priced markets and $350,000 for the rest of the country.

People will also be able to withdraw more money from their KiwiSaver account to use as a deposit for a home. First-home buyers will now be able to withdraw the Government's annual contribution to their account as well as their own and their employers.

The threshold for the Welcome Home Loan will also be lowered so prospective buyers will only need a 10 percent deposit to get a government-guaranteed loan.

Housing Minister Nick Smith says the changes to the government loan threshold will double the number of people eligible to 20,000 a year.

The KiwiSaver First Home Withdrawal is limited to those buying a first home who have been contributing for a minimum of three years.

It will have other criteria, including an income below $80,000 for an individual and $120,000 for a couple and the house being bought needs to be below the regional house price limits.

According to Dr Smith, Treasury and the Reserve Bank say just providing grants to enter the existing market would undo some of the work already done in Auckland.

He believes it will send a "strong signal" to building companies and there will be tens of thousands of prospective buyers if they can build houses in Auckland for $550,000.

The Green Party has criticised the scheme, saying the "meek" policy does nothing to make housing more affordable and new home buyers are on average $228,400 worse off than when National took power.

Co-leader Russel Norman says today's announcement is a band-aid for a much more serious problem.

"National chucking a few dollars at deposits does almost nothing to offset the massive increase in the average house price under their watch," he says.

While first home buyers would welcome the additional support, it's a "drop in the bucket" for them. 

"A few thousand dollars more for a deposit doesn't address the much bigger issues of mortgage servicing and the lack of supply of genuinely affordable houses."

The Greens say they would introduce a capital gains tax, excluding the family home, put restrictions of foreign investors to dampen housing speculation, have a rent-to-own housing scheme and build more affordable and state homes.

National's three major changes:

  • Overhaul the KiwiSaver first home deposit subsidy, renaming it HomeStart, doubling the support for new home buyers and increasing house price limits
  • Allow people to withdraw more money from their KiwiSaver account to use as a deposit on their first home
  • Make more people eligible for Welcome Home Loans, by making the price limits the same as those for the KiwiSaver HomeStart grant.

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source: newshub archive