Quarter acre dream disappearing
Media Release – October 3
Quarter acre dream disappearing but should Government assist first homebuyers - Mortgage brokers
The New Zealand Mortgage Brokers Association today questioned the Government’s role in assisting first home buyers solely through a Kiwibank scheme.
The association (NZMBA) said the ability of generally young people to purchase their first home had significantly diminished due to rising values, rising rentals and static incomes.
But NZMBA chairman Brian Berry today questioned whether the Government should be involved in assisting home ownership in New Zealand.
``All in the market applaud the philosophy of support, but any assistance should be made available to the whole lending market and not delivered in an anti-competitive manner via a single Government-guaranteed distribution channel.’’
New research commissioned by the ASB Bank has confirmed that rising house prices are forcing many young people to put off or even give up buying their first home. It showed a 20 percent deposit on a median price house is now about two and a half times the average person's income.
Mr Berry said the Government was helping young house hunters through the first home buyer’s scheme available solely from Kiwibank.
``Those in the market place who make their living from mortgages can feel aggrieved by the Government assistance provided solely to Kiwibank,’’ he said.
As the market has changed and achievable deposits have dropped, these players - the mortgage brokers, the lenders and the lenders’ mortgage insurers - have had to find innovative ways to assist with home ownership, within the scope of having to control their risk.
``Then along comes the Government and provides a risk free environment for Kiwibank to operate under, where clients have very low or nil deposits available. Perhaps this is a thinly veiled anti-competitive attempt at ensuring Kiwibank picks up more business and therefore is more likely to achieve profitability in a timely manner? So much for a level playing field.’’
Achieving support for assisting first-home buyers should be delivered via a freely competitive market and not via a single, Government-backed, anti-competitive distribution channel.’’ Mr Berry said.