The Government has announced a raft of changes aimed at solving New Zealand's housing crisis and getting more people in to their first homes. But what does it mean for Bay of Plenty and is it enough? Journalist David Beck reports.
• $3.8b for accelerating housing supply
• First Home Grant caps lifted, as well as higher house price caps
• Bright-line test doubled from five to 10 years
• Interest deductibility loopholes scrapped
• Govt to offer Kāinga Ora $2b loan to scale up land acquisition
• The Apprenticeship Boost scheme extended
The Government plans to help first-home buyers into the market by increasing the caps for financial support and extending the bright-line test to 10 years.
Prime Minister Jacinda Ardern said the plan is a package of both urgent and long-term measures to relieve pressure.
Housing Minister Megan Woods said the new money for the housing acceleration fund – some $3.8b – will help greenlight tens of thousands of house builds in the short to medium term.
"This fund will jump-start housing developments by funding the necessary services, like roads and pipes to homes, which are currently holding up development.
"This package will accelerate the building of new houses, in the right place."
From April 1, the income cap to access first home grants and loans will be lifted from $85,000 to $95,000 for single buyers, and from $130,000 to $150,000 for two or more buyers.
Regional price caps for accessing support have also lifted.
Tauranga's house price cap for new properties has been lifted from $550,000 to $600,000 and from $500,000 to $525,000 for existing properties.
REINZ's latest figures show Tauranga's new median house price has reached $905,000.
In Rotorua, the house price cap for accessing first home grants and loans remains at $500,000 for new properties and $400,000 for existing properties.
Rotorua has reached a new median house price record of $617,000.
Rotorua Professionals McDowell Real Estate co-owner Steve Lovegrove was not convinced the announced changes would do enough to solve the housing crisis.
He said if the housing acceleration fund was going to work it would need to result in quick action and he questioned how much of that Rotorua would see.
"[That funding] is critical but they will need to distribute and expedite that really, really quickly to local councils to make sure that those services are done.
"That money could be spent quite thinly - is Rotorua going to be a priority or left at the end of the food chain?"
Lovegrove said the changes aimed at helping people into their first homes assumed there were enough houses to cope with that demand, but there were not.
"We don't need to stop investors - our problem is we don't have housing for people who need to rent them. Who is supplying that? The Government isn't."
More people buying their first homes and living in them would lead to more people looking for rentals, increasing demand and leading to more homelessness - a major issue in Rotorua especially, he said.
"The people buying them have often, typically, been living with their parents or others. There's an assumption that we're converting renters to homeowners but that's not actually happening. We're kicking renters out so that homeowners can buy those rental properties."
Lovegrove said the change to the bright-line test, which means people have to pay tax on any gains on the property if it's sold within 10 years, would have "very little effect" on curbing would-be investors.
"At the end of the day, they don't have to pay any tax on selling a property until they sell at 10 years. Even if you pay tax on your capital gain, you're still making better money than putting it in a bank.
"All that will mean is a better tax collection for the Government. That measure is like saying people are eating too much so we'll close the supermarket for longer."
Tauranga's Te Tuinga Whanau Support Services Trust executive director Tommy Wilson said it was crucial that any changes made by the Government needed to result in the availability of more rentals.
"Our only hope is more rentals," he said.
"Buying a home is just off the radar for any of the people we deal with and we've got 120 families under our care and we engage with 4000 people a year."
He hoped people buying homes might free up some of the rental market.
"We've had close to 3000 families move to Tauranga post-Covid and when that happens they are the first cab off the rank for rental properties.
"When that happens we are further behind the eight-ball and the problem perpetuates itself. In a way, in Tauranga, we're penalised for our prosperity. I applaud anyone for doing well but we're leaving the disenfranchised behind which puts more strain on organisations like us."
First National principal and Rotorua REINZ spokeswoman Ann Crossley said the fact Rotorua was not one of the regions where price caps for accessing support had been increased was "ridiculous".
"First home buyers can't buy at $400,000," she said.
Crossley said the solution for the housing crisis is "nothing except supply".
"We just need more houses and that isn't a quick fix. They've done nothing to show that they have got a handle on that.
"[$3.8b to speed up infrastructure and land availability] is a good thing but, even if Rotorua got a slice of the action, how long would it take Rotorua to fix its infrastructure like stormwater? That's not a quick fix either.
"Then, tell me where you're going to find builders to build 10s of thousands of houses in the short-term. Like any story, there's so many sides to it."
She said landlords were being "penalised again".
"The only way landlords can cope with all these changes is to put rent up which makes housing affordability worse.
"You've already made it hard to get rid of a tenant so anyone with a slightly dodgy history won't get a property because they know it's hard to get rid of them."
Managing director of Realty Group Limited, which owns Bayleys and Eves, Simon Anderson, said it was good to see a plan from the Government but we now needed to see action.
He said the scrapping of interest deductibility loopholes could encourage investors to look at alternate investment options.
"This is where the big difference will be for some property investors and it may just accelerate the desirability to look at other asset classes. Rather than having a portfolio that's all residential they might look at commercial.
"I can't see the bright-line change making a difference. What's the difference between five and 10 years?"
Anderson said the rising of price and income caps for first-home buyers was helpful but questioned whether it was enough.
"Any improvement or lift is a bonus and will certainly help some people but it may not be considered high enough given the way property prices have increased. It's way below the median price but the intent is there."
In relation to the $3.8b being put towards infrastructure and land availability, he put forward the idea that the Bay of Plenty be used as the first case study.
"We could sort our roading, our infrastructure and get developments approved. I think we'd be a shining light for the rest of New Zealand.
"It all depends how and where that money is used. Everything they've done so far to try and sort this problem has failed. This is a start but it's not a whole solution. The problem is bigger than that.
"Look at Rotorua with the emergency housing and everything that's happening there. We've got scary times ahead of us and something serious needs to be undertaken. I think it has to be driven by the private sector with Government support.
"If the Government has a plan but doesn't make it work then we're no better off, we've just lost another couple of years."
Jefferies and family will enjoy a leg of lamb with summer sides.