First-home Buyers Mustn’t Be Excluded From Budget 2021
One real estate boss says the Finance Minister is alarmingly silent on what the Government will further do to help first-home buyers into the property market. In fact, he is now actively lowering expectations ahead of Budget 2021 on 20 May.
The comments from Derryn Mayne, Owner of Century 21 New Zealand, follow Grant Robertson’s Pre-Budget speech to the Wellington Chamber of Commerce this morning.
There the Finance Minister talked up the Government’s housing package in March but alluded to no further housing announcements in the forthcoming Budget. Instead, he said ‘turning around a housing crisis, decades in the making, will take time’.
“I truly hope first-home buyers will feature strongly on Budget Day with measures that actually get them into the property market. The Finance Minister has long promised to ‘tilt the balance more towards first-home buyers’ but almost every Kiwi would agree that has yet to be achieved,” she says.
Ms Mayne acknowledges the Government recently lifted the price caps on eligible properties and the income thresholds of first-home buyers applying for HomeStart Grants and First Home Loans. However, she says at best it has turned out to be tinkering with little positive impact so far.
“Try buying an existing house in Auckland for $625,000 or a new build in Auckland for less than $700,000. In fact, since the higher price caps took effect on 1 April, we’ve in turn seen developers bumping up their townhouse and apartment prices to just below the new maximum caps. That’s a terrible public policy outcome and only puts more debt on first-home buyers.”
She says while property prices might be flattening out in some quarters, demand certainly isn’t with first-home buyers still forced to go beyond the pale to secure a property.
Her comments follow Realestate.co.nz confirming their popular property website is expecting even more search traffic this year – a significant finding given 2020 was the website’s busiest year since 2016.
“Demand remains strong, but nationwide real estate agencies of every colour just don’t have the stock to match that demand. In fact, according to Realestate.co.nz the number of houses on the market nationwide in April was down nearly 20% on the same time last year. That’s a significant shortfall of listings,” she says.
Ms Mayne says prospective sellers who own properties outside the reach of most first-home buyers should list sooner rather than later if they want to achieve maximum interest and price. Policies are now taking hold which are seeing less investors competing for property.
“The Government has got particularly tougher on property investors, which is already seeing fewer enter the market and more exiting. The Reserve Bank has also introduced a 40% deposit requirement for investors which is slowing down the likes of ‘mums and dads’ looking at purchasing a second home to rent out,” she says.
The Century 21 leader says while the Government is achieving some sustainable cooling in parts of the property market, it remains miles off being tilted in favour of first-home buyers.
“First-home buyers are not expecting a free lunch in Budget 2021, but they will be anticipating some workable policies and plans that ensure a leg up on the property ladder.
“Enabling more young Kiwis into property ownership would be one of the greatest things this Government could deliver for the future and security of New Zealanders. Two weeks until Budget Day and we all wait with bated breath,” says Derryn Mayne.