Calling all first home buyers the 2022 budget is for you!
It’s been a tough market for first home buyers the past few months with house prices sky-rocketing, interest rates increasing and CCCFA changes making it challenging for aspiring homeowners to join the property ladder. Thankfully, the 2022 budget announcement brought welcome relief for prospective first home buyers across New Zealand.
Here’s a summary of the Budget 2022 key takeaways:
House Price Caps Removed for Kainga Ora First Home Loans
The 2022 budget announcement brought news that the regional house price caps which previously applied to first-home buyers applying under the Kainga Ora First Home Loan Scheme (previously, Welcome Home Loan) would no longer apply.
So, what does this mean for me? With the house price caps now removed, first home buyers are no longer limited o by how much they can spend on a home. This means buyers can choose from a wider range of homes that fit their needs with as little as 5% deposit. The balance of your deposit is guaranteed by Kainga Ora (formerly Housing NZ) in exchange for a 1% fee.
Income limits still apply to the first home loans. These are:
- $150,000 for a couple OR a single person with dependants
- $95,000 for a single person with no dependants.
An Increase in House Price Caps for Kainga Ora First Home Grants
It was also announced that the house price caps have been increased across the country, which is great news doe first home buyers. This means that in all regions across the country first, homebuyers can spend more and still qualify for the Kaianga Ora First Home Grants.
What this means for first-home buyers looking to buy in the Hawkes Bay region:
- You can now spend up to $625,000 on an existing home and $825,000 for a new home in Napier and Hastings and
- You can now spend up to $500,000 for new and existing homes in Central Hawke’s Bay.
This is great news as the previous house price caps were extremely low, limiting first home buyers from accessing the grants. The changes will offer more choices to many first home buyers.
House Price & Income Caps to be regularly reviewed
Equally as important is the agreement that the house price and income caps will be reviewed on a 6 monthly basis to ensure they’re in line with the housing market. The lack of regular reviews in the past, particularly given the rapid change in the housing market, has been a frustrating experience for many first home buyers. So this commitment should come as welcoming news.
If you’re still left with some unanswered questions, take a deep dive into some of the further resources provided below.
If you’re not too sure how these changes affect you, and you’d like to have a chat with us – get in touch as we’d love to help.
Helpful resources:
Budget 2022 – Support for first home buyers and renters – Behive
Budget 2022 – At a Glance – Budget 2022
Budget 2022 – Changes announced for First home buyers – Kaianga Ora
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While we’re home loan experts, our blog posts are for general information purposes only and are not intended as financial advice. If at any stage you need personalised advice, get in touch on 06 8788 4444 or Ben or Mark.
