31 Jul 2016

Kiwisaver change won't help in Akl market - Labour

5:06 pm on 31 July 2016

The government's latest changes to the KiwiSaver HomeStart scheme will not help more people buy their first home in Auckland, says the Labour Party.

House for sale in Upper Hutt.

Photo: RNZ / Alexander Robertson

Building and Housing Minister Nick Smith announced today that income and house price caps have been lifted for the KiwiSaver Homestart scheme. He said the rise reflected increases in house prices since the scheme began last year.

The HomeStart scheme allows people to use money from their KiwiSaver accounts to buy their first home. It came into effect last year, replacing the KiwiSaver first home deposit subsidy.

Mr Smith said the income cap for a single person would rise from $80,000 to $85,000, and for a couple from $120,000 to $130,000. The house price caps are also being raised.

"The government wants the HomeStart scheme to help middle income earners into homes.

"Since we started the scheme incomes have gone up, so we're increasing both the income limit and the house price cap."

Dr Smith said 15,000 people had already made use of the scheme.

He said HomeStart allowed more people to get a cash deposit to help buy their first home.

But Labour leader Andrew Little said the changes were just tinkering around the edges.

"The fact that up till now only 9 percent of successful applications under the scheme have gone to Auckland tells you the big problem is that there aren't enough affordable houses in Auckland at least.

"There needs to be more houses at an affordable level, just changing the financing arrangements by a few percentage points isn't going to fix the problem."

Mr Little said the HomeStart scheme had been a failure, with a budgeted $10 million in subsidies not taken up.

The house price caps are being increased from the existing $550,000 for Auckland, $450,000 for Christchurch, Hamilton, Tauranga, Queenstown and Nelson-Tasman and $350,000 for the rest of the country, to $600,000, $500,000 and $400,000 respectively.

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