Focus: NZ Herald Political Reporter Jason Walls breaks down Megan Woods’ KiwiBuild reset announcements. Video / Mark Mitchell
Housing Minister Megan Woods says committing to specific KiwiBuild targets was a mistake, admitting today the Government should not have wedded itself to the 100,000-KiwiBuild-homes target.
But she is confident that the new reset KiwiBuild policy still has what it takes to deliver on the Government's housing goals.
The 100,000 KiwiBuild homes over 10 years target was axed as part of the reset.
This comes just months after the policy's interim targets, including building 10,000 homes a year, were also scrapped.
Now, the Government has simply committed to building "as many houses as we can, as quickly as we can".
But $400 million has been earmarked for new "progressive homeownership" programme which could support up to 4000 households into homeownership.
The Government has also made it easier for first-home buyers to get Government assistance, by dropping the required deposit for a Government-based mortgage from 10 per cent, to 5 per cent.
The new rules also mean that from October 1 this year, family and friends will be able to pool their respective $10,000 First Home Grants and KiwiSaver to buy their first home.
The Government has been praised by some for making it easier for people to get into a first home, but slammed by the Opposition for breaking an election promise.
Woods today told media the Government was "clearing the decks of what hasn't worked" and that putting specific KiwiBuild targets in place forced the Government to build homes in areas where there was little or no demand.
Many of the KiwiBuild homes that have remained unsold now have to be put back on the market.
The reset has drawn criticism from National housing spokeswoman Judith Collins, who said the policy had proven to be a "damp squib".
The reset has drawn criticism from National housing spokeswoman Judith Collins, who said the policy had proven to be a "damp squib". Photo / Mark Mitchell
"It's pretty easy to achieve targets when there aren't any, which appears to be the Government's strategy on housing."
She accused the Government of massively retreating from the "flashy promises that Labour fooled the public with for so many years".
But social housing providers are praising the Government's approach.
"The Government's new approach to homeownership is a win for the many thousands of New Zealanders seeking an affordable place to call home," Community Housing Aotearoa Chief Executive Scott Figenshow said.
He is upbeat about the "progressive homeownership" initiative whereby $400 million of reallocated KiwiBuild funding would support up to 4000 households into homeownership, likely through a rent-to-buy or shared equity scheme.
$400 million has been earmarked for new "progressive homeownership" programme which could support up to 4000 households into homeownership. Photo / George Novak
The rent-to-buy scheme has been particularly welcomed by Greens co-leader Marama Davidson.
Such a scheme was in the Government's supply and confidence agreement with Labour. Speaking to media this afternoon, Davidson described today as one of the best in her political career.
"I want to say to those New Zealanders today who have given up hope on their dream of owning a home that we have opened the door to you."
More details of the rent-to-own scheme will be put to Cabinet later this year. Collins said New Zealanders who dream of homeownership will feel let down by the KiwiBuild reset.
"There were no new initiatives to speed up the delivery of houses. All we got from the new Housing Minister was a commitment to try harder.
"What are prospective first-home buyers supposed to do with that? It's meant to be KiwiBuild, not KiwiHope."
Real Estate Institute of New Zealand Chief Executive Bindi Norwell said the progressive homeownership programme was a good step.
"This will significantly help a number of first-home buyers, as saving for that initial deposit was often the biggest hurdle to getting on the property ladder."
KiwiBuild – what's changed?
• 100,000-KiwiBuild-homes target over 10 years is gone
• $400 million has been reallocated to a new progressive housing programme, likely to contain a rent-to-buy scheme
• Dropping the required deposit for a Government-backed mortgage from 10 per cent to 5 per cent
• Allowing the pooling of more than two people's First Home Grant and KiwiSaver for a home deposit
• KiwiBuild buyers of studio and one-bedroom homes will be able to sell the property after one year, instead of three
• A max of 10 per cent of KiwiBuild homes are able to be over the price cap if they are four or more bedrooms; previously there was a blanket price cap on all homes
• People who have previously owned a home no longer have an asset limit when looking to buy a KiwiBuild home; previously they were not allowed to have assets worth more than 20 per cent of the First Home Grant price cap.
How will it work?
First-Home Grant:
Under the current rules, if a family with a combined income of $130,000 – three working full time and one part-time – is looking to buy a $700,000 home, they would only be able to get two First Home grants of $20,000.
But, under the new scheme, they would get a $40,000 grant and be able to withdraw $70,000 from their KiwiSaver.
Under the current rules, a 40-year old 'second chancer' who has moved to Tauranga and has assets of more than $200,000 and income of $72,000 would not be able to buy a KiwiBuild home capped at $500,000.
