Kāinga Ora First Home Partner scheme stops taking applications amid surge in first-home buyers

Despite rising interest rates, the first-home buyer market share of property purchases is at a record high.   

Demand is so strong, one of the Government's shared ownership schemes has reached capacity and is no longer accepting applications.   

Nadia, who owns a townhouse in south Auckland, was one of the lucky last few to benefit from the First Home Partner scheme, launched in 2021.   

"I was just doing my research, Googling options of shared ownership schemes, and this came up," she told Newshub.   

First-home buyers with a household income of $150,000 or less can apply if they have at least a 5 percent deposit. To fill the gap, Kāinga Ora takes a stake in the property of up to $200,000, which the buyer progressively pays off.  

The scheme has overseen more than 410 signed agreements.  

Nadia says she would not have been able to buy her first home without the scheme.  

"It's really made my dream of buying my first home come true."  

But it is a dream she nearly missed, because an update on Kāinga Ora's website says: "Due to recent unprecedented demand, the scheme is now fully subscribed and therefore we will not be accepting any new applications."  

Kāinga Ora told Newshub, following recent changes to extend eligibility to existing homes and increasing income caps, there has been a 450 percent surge in monthly applications.  

"We are currently processing the huge number of existing applications we have at different stages and will be in contact with all applicants shortly," said Nick Maling, general manager national services, Kāinga Ora.  

"We encourage all those looking to purchase a home to consider the range of other home ownership products Kāinga Ora administers, such as First Home Loans and First Home Grants."

It is a surge reflected in CoreLogic data showing the first-home buyer market-share of purchases is at a record high, from a low of 17.5 percent in 2014 to 26.4 percent today.   

"Kāinga Ora support measures, First Home Grants, First Home Loans, also accessing KiwiSaver for deposit, is definitely a way into the market for first-home buyers," CoreLogic property economist Kelvin Davidson told Newshub.   

The problem is the schemes are not cheap. Hundreds of millions of dollars have been paid out in First Home Grants, and the $187 million over three years for the First Home Partner scheme is now fully subscribed. 

Neither National nor ACT are committed to continuing the scheme if they form a government after the election. 

"Kāinga Ora is a mess and we will commission a review into its finances quickly after the election," said National's housing spokesperson Chris Bishop. 

Shaneel Singh from Whitestone Group helps first-home hopefuls get a foot in the door. He told Newshub he hopes politicians will not give up on the First Home Partner scheme.  

"This whole system is engineered for working-class Kiwis to get on the ladder and in a way, it's almost robbing them of an opportunity, so it's a real shame."