Mike Pero and the HomeStart package
POSITIVE OUTLOOK FOR FIRST TIME BUYERS
25 August, 2014
Mike Pero believes the proposed National housing plan would be positive for the housing market.
Over the weekend, National announced their $218 million HomeStart package which aims to help an estimated 90,000 first home buyers and young families into their own homes.
“I believe it’s a very positive outlook for homeowners and for the country’s housing problem. It’s a hand up rather than a hand out and I believe it fits well with the state of the nation and for thousands of people considering home ownership over the next few years” says Pero.
The HomeStart scheme would replace the Kiwisaver First Home Subsidy. It would assist those buying a new home by increasing support and house price limits. It will also allow first home buyers to withdraw a larger sum from their Kiwisaver savings (however they wouldn’t be able to withdraw their $1000 kick-start).
“In my experience it’s not the debt servicing that’s the issue for new home buyers, it’s getting the deposit together that’s the tricky bit so this seems to me to be a good start” said Pero.
Currently, first home buyers are eligible for a grant of $3,000 after three years in KiwiSaver, $4,000 after four years and $5,000 after five years. Under KiwiSaver HomeStart, this grant will double to $6000 after three years, $8,000 after four years and $10,000 after five years for the purchase of a newly-built home.
“On an example of a $550,000 home with a 10% deposit the repayments might be as low as $700 per week. If a couple of Aucklanders were renting they’ll be paying close to that in rent and if they could save, their savings would hardly keep up with inflation. My philosophy has always been buy now, pay later and you should always aim to get into a home as soon as you can. The earlier the better.”
The house price limits for KiwiSaver HomeStart and Welcome Home Loans will be $550,000 in Auckland, $450,000 in Wellington, Christchurch and other similarly-priced housing markets, and $350,000 for the rest of the country.
The KiwiSaver First Home Withdrawal is limited to members buying a first home, who have been contributing for a minimum of three years. The KiwiSaver HomeStart Grant and Welcome Home Loans have additional criteria of people having an income below $80,000 for an individual and $120,000 for a couple, and the house being purchased must be below the regional house price limits.
If National is re-elected, the changes would come into effect in April 2015.