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Exempt first-home buyers, says second real estate boss

Exempt first-home buyers, says second real estate boss

“The 20 percent deposit requirement for first-home buyers should be scrapped for lower valued properties,” says Geoff Barnett, National Manager of Century 21 New Zealand.

His comments follow similar calls from Barfoot and Thompson director Peter Thompson recently. Yesterday REINZ also called for a review on LVR restrictions.

The Reserve Bank introduced lending restrictions to help cool Auckland's housing market. Mr Barnett says with prices now normalising, Wellington officials need to review the suite of measures still in place two years on.

“I agree with Peter Thompson that many first-home buyers should be exempt from the blanket high deposit requirements. They should still pay a deposit and their savings history and ability to service the mortgage must still be heavily scrutinised, but it’s time they got a fairer go.

“We’ve got young couples in Auckland earning a quarter of a million dollars between them, who could easily service a mortgage but because of high rents and living costs, they struggle to save a big deposit. It’s over $200,000 in deposit just to buy the average Auckland home!”

While Mr Thompson is reportedly asking for first-home buyers to be exempt if they’re buying a property for less than $600,000, Mr Barnett says in Auckland the threshold should be $750,000.

“The reality is if the noose was slightly loosened for first-home buyers, many would opt to buy simply because with relatively low interest rates, servicing a mortgage will be comparative to renting if not cheaper.”

Mr Barnett says he wants to hear more from politicians this election on their views on the current restrictions given the cooling market and numbers of Kiwis unable to enter it. He remains particularly concerned with one party’s policy on housing.

“The Opportunities Party’s policy is to effectively keep all rental properties rentals in perpetuity and not be sold without the existing tenants as part of the package. This would only curb future investors and developers, stunting the country’s rental stock, and putting further pressure on rents. I’m all for giving tenants security but there are better ways of doing it.”

Another issue, he says, that needs to be debated are the high costs associated with consenting new houses and often unacceptable time delays.

“Catch-phrases like cutting red tape with be in most parties’ manifestos. However, I want to know actual percentage or dollar value gains the different parties’ policies would deliver for new home buyers. The rhetoric no longer cuts it. We’ve heard it for years while consenting costs, inspection fees, and development contributions have only gone up.”

On the issue of land supply, Geoff Barnett, says this election he’s looking for parties to take a more pragmatic approach to planning to allow much-needed residential developments to progress where a great outcome can trounce any underlying rigid zoning rules.

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