It’s no secret that buying a house today is an expensive endeavour – for many, too expensive. That’s a problem the Government’s KiwiBuild initiative has been designed to solve.
To find out more, we got the team at Money Empire to walk us through what the policy was and what it means for first home buyers in New Zealand.
What is KiwiBuild?
KiwiBuild is a Government initiative to get first-home buyers into the New Zealand market – but crucially, Kayne explains, “at a price that’s affordable and they can realistically service the debt on.” To do this, the Government has put $2 billion towards building 100,000 modest starter homes around the country, half of which will be in Auckland. There are three kinds of homes to choose from:
- 1 bedroom, studio or one+study for a maximum of $500,000.
- 2 bedroom for a maximum of $600,000.
- 3 bedroom for a maximum of $650,000.
For hot real estate markets, these homes are much more affordable than you could find on the open market, particularly in Auckland where it’s a fair way below the median house price.
There are some eligibility requirements, however: your combined gross household income must no more than $180,000 per year, or $120,000 if you’re single, and you have to live in the home for at least three years. That said, if you meet the criteria, the homes are being offered with very favourable lending terms too – Kiwibank has announced they’ll offer mortgages on KiwiBuild properties with only 10 per cent deposit required. Part of that deposit can come from KiwiSaver and, if eligible, the HomeStart grant too.
New KiwiBuild developments are set to make housing more affordable in tight markets.
Who should take advantage of the KiwiBuild initiative?
Anyone who wants into the market and is eligible, the team says.
“If you buy a three-bedroom KiwiBuild home for $650,000 in the greater Auckland area – that exact same house on the open market is worth anywhere between $800,000 and $1,000,000. You’ve made money straight away, for free.”
There are some conditions to be aware of, however. For one, you don’t get to choose the exact house – you go into a ballot for the area and if successful you’re given the chance to buy a house on the site.
Online pre-qualification is now open, which can tell you whether you’re eligible to enter the ballots, the first of which will be drawn in October for houses in Papakura, Auckland.
To learn more about working with the team at Money Empire, get in touch with a member of the team today.