This is good news for potential first-time home buyers.
In yesterday’s Budget, Housing Minister Dr Megan Woods announced that house price caps for first home subsidies would increase in many parts of the country.
As home prices rose last year, many would-be buyers were caught off guard as prices rose above the subsidy cap.
The government has also removed caps on first home loans entirely to give buyers more choice of homes, Dr Woods said.
She estimated the changes would provide about 7,000 additional grants and 2,500 home loans each year.
In Dunedin, the previous subsidy cap on existing homes was $425,000. This amount has been increased to $500,000.
For new construction in the city, the cap has risen to $675,000 from $550,000 previously.
In the Queenstown-Lakes District, the cap for existing homes has increased from $600,000 to $875,000, while the cap for new construction has increased from $650,000 to $925,000.
In other areas, such as Southland and the West Coast, caps on existing homes would now float between $400,000 and $875,000.
New construction went from $500,000 to $925,000.
House price income caps would now be reviewed every six months to ensure they remain up to date.
Dr Woods also announced the Affordable Housing Fund, aimed at supporting the development of new affordable housing for low-to-moderate income families in areas facing the greatest housing supply problems.
The fund, which had $350 million committed, would leverage partnerships with investors, philanthropic organizations, developers and the affordable housing sector.
“Building costs make it harder for many of our providers to provide affordable housing.”
The fund would “bridge the gap” for organizations to build new rental housing, Dr Woods said.
In Housing budget
- Housing price caps for First Home Grant have increased in many parts of the country.
- House price caps for first home loans have been removed entirely.
- The Kainga Whenua loan ceiling will increase from $200,000 to $500,000.
- The Affordable Housing Fund will initially provide support to non-profit rental providers.
- Significant additional funding to meet current and projected costs for public and transitional housing.
— Riley Kennedy