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Generation Homes 5 percent deposit scheme to continue

July 25, 2013

Generation Homes 5 percent deposit scheme for new houses to continue

Despite possible moves by the Reserve Bank to place restrictions on low-deposit lending for houses, national building company Generation Homes will continue to offer a 5 percent deposit option for new home buyers.

Generation Homes CEO Kevin Atkinson says the ability to offer a 5 percent deposit is not aimed at circumventing attempts to take the heat out of the housing market.

“For a start, we are talking about new homes – the very thing the housing market needs more of at the moment – to address supply shortages

“Like all borrowing situations, there are conditions attached,” he says. “But the advantage for us is our lending partner is able to look at our offerings as fixed price quotes and not have to make an allowance (sometimes up to 15 percent) for the builder going over budget.”

“Even if the Reserve Bank follows through and introduces limits to loan-to-value arrangements (LVR), the mooted changes will not eliminate low-deposit home loans, although the lenders may have restrictions placed on how many of those types of loans they can make,” he says.

“Proposed rule changes around the use of Kiwisaver for a first home deposit have the potential to help first home buyers. Our ability to offer house and land packages, with our guarantees backed by the ability to offer a 5 percent deposit to approved purchasers can only help in a tough market,” Kevin says.

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With the maximum house price for Kiwisaver deposits set at $400,000, there are few opportunities for purchasers to take advantage of the scheme in markets such as Auckland.

The nationwide company, with joint venture partners in 13 locations, has built more than 2200 homes throughout New Zealand, backed by a fixed price (inclusive of all fixtures, fittings and landscaping) and guaranteed 14-week delivery date promise for every house.

Generation Homes was founded by Kiwis Graham Hockly and David Mansel in Tauranga in 1997.


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