The promise of building 100,000 KiwiBuild houses in 10 years has been dropped by the Housing Minister who described it as "overly ambitious".
Megan Woods, who took the reins from Phil Twyford in June, said the Government will now focus on "building as many houses as we can, as fast as we can, in the right places".
The axed target is part of the Government's much-anticipated KiwiBuild reset announced on Wednesday, after the flagship policy's interim targets were dropped in January.
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Here's what's changed:
- the goal of 100,000 houses in 10 years has been dropped
- $400 million has been allocated to support home ownership schemes such as rent-to-buy
- buyers of KiwiBuild studios and one-bedrooms only have to commit to living in it for one year rather than three
- friends and family can combine their $10,000 First Home Grants together for a deposit
- the deposit requirement for a First Home Grant has been dropped to 5 percent from 10 percent
- the amount developers can receive for triggering the underwrite has been reduced
New KiwiBuild rules
Woods has announced that KiwiBuild homes in Te Kauwhata, Canterbury and Wanaka that haven't sold yet will be released to the open market.
That will allow the Government to reuse the capital to "get more developments underway where there is clear demand".
The amount developers can receive for triggering the Government's underwrite scheme will be reduced so developers are incentivised to sell to KiwiBuild first home buyers instead of triggering the underwrite.
Buyers of some KiwiBuild houses will no longer have to live in the home for three years before they can sell it. Buyers of studios and one-bedrooms will only have to commit to living in them for one year.
The Government will now allow up to 10 percent of KiwiBuild homes in development to be over the price cap if they are four-bedroom or larger.
And people who have previously owned homes, described as 'second chancers', will no longer have an asset limit to purchase a KiwiBuild home, but they will still have to not currently own a home and meet an income test.
The Government has also announced changes to the requirements for a KiwiSaver HomeStart grant, or as it's now called the First Home Grant.
The deposit requirement for a loan or grant has been reduced from 10 percent to 5 percent.
New home ownership schemes
Four hundred million dollars of the Kiwibuild cash pot will be set aside to support home ownership schemes - part of the confidence and supply agreement between Labour and the Greens.
The Progressive Home Ownership model will support both shared equity or shared ownership schemes and also rent-to-buy schemes, which have been pushed by the community housing sector.
Woods said it will mean that over time, families can buy further chunks of their mortgage until they own the home outright.
She said the Government will also reduce the deposit required for a Government-backed mortgage to 5 percent, and allowing groups to each use their $10,000 First Home Grant and their KiwiSaver to buy their first home together.
The Government provided an example: a multi-generational Pasifika family with four incomes totalling $130,000 in Auckland, looking to buy a large townhouse at $700,000.
The family will now be able to get four First Home grants at $40,000, and withdraw $70,000 from their KiwiSaver.
They were previously only able to get two First Home grants of $20,000.
The maximum First Home Grant is $10,000 for building or purchasing a new home, after three years of contributing to KiwiSaver.
Green party co-leader Marama Davidson said saving a deposit for a home is "no longer achievable for many New Zealanders".
"We will now be rolling out progressive home ownership schemes, and supporting community housing providers and iwi to deliver progressive home ownership."