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May 8, 2016 | by  | in News Splash |
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How to buy a house in Wellington

But not Auckland, you’re fucked there

 

Two-thirds of applications approved for first homebuyers in Wellington have resulted in the purchase of a property since April 2015.

This figure comes from the first year data of the KiwiSaver HomeStart grant that replaced the KiwiSaver deposit subsidy.

Similar to its predecessor, the grant aims to provide eligible first homebuyers with a grant of up to $5000 for individuals and up to $10,000 for couples to put towards the purchase of an existing/older home.

Additionally, the HomeStart grant provides eligible first-home buyers with a grant of up $10,000 for individuals and up to $20,000 for couples to help with purchasing a brand new property.

To be considered eligible to withdraw money under the HomeStart grant, a potential first-home buyer must meet various criteria.

Along with being over 18 years old and not being a current home or landowner, Housing New Zealand stipulates that an individual must have made the minimum allowable contributions to their KiwiSaver scheme and have at least a ten percent deposit on the property price.

The average value of a house in Wellington is $597,000, a 6.6 per cent increase since 2012, according to the latest Wellington city evaluation.

This means an individual would need approximately $59,700 for a deposit to be eligible for the HomeStart grant. To save up this deposit over two years, one would need to put away $574 a week.

Translated into student speak, that’s approximately 22 casks of Country Dry White; a quantity not nearly big enough to help drown out the crippling reality of house prices in New Zealand.  

In popular student areas like Newtown and Mt Cook, property prices have increased by ten percent since 2012.

Harcourts Wellington City managing director Marty Scott said that it was not uncommon for buyers to pay approximately $60,000 more than they planned when looking for houses under $600,000, with first-timers often trawling the fringes of the city for affordable property.

He said, “people who want to buy in these ‘mid-range’ areas will face quite a few disappointments and are likely to be outbid” as these properties were in high demand and short supply.

So with home-ownership becoming increasingly out of reach with every passing day, Building and Housing Minister Dr Nick Smith has sought to (kind of) address the situation by adjusting eligibility criteria for the HomeStart grant.

Currently, the limit for income before tax of an individual eligible for the grant was capped at $80,000, or $120,000 for a couple. Dr Smith hopes that removing the cap for second-chance homebuyers will help older, middle-income earners become homeowners again after separation or business failure. Essentially helping out baby boomers who need it rather than baby boomers who are entitled and annoying and ruining the economy.  

True to form, Smith proceeded to tell the world (aka, Morning Report listeners) that “housing affordability in Auckland and every other market in New Zealand is actually more affordable now than when National came to Government,” citing the Massey University Housing Affordability Index.

The document’s author Dr Susan Flint-Hartle has since corrected this statement, saying despite affordability improving slightly over the last three quarters, this is definitely not the case over the last three terms under National government.

Mayoral candidate Justin Lester has promised in his campaign a $5000 rates rebate for first home builders if voted in as mayor.

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