More properties are available to first-time home buyers after price caps on first-home grants were lifted in the budget. But what is there to sell at the new limits?
There have long been complaints that price caps have been set too low, and as the market soared last year, those concerns intensified.
In a bid to address this, the government announced last week that price caps for first home loans would be removed completely from June 1 and lifted price caps on first home grants from June 19. may.
Housing Minister Megan Woods said this recognizes price changes over the past year and aligns subsidy caps with bottom quartile market values for new and existing properties.
* Suburbs that are hotspots for first-time home buyers
* What you can really buy in the few Auckland suburbs still priced under $1 million
* The cheapest house selling price in New Zealand
The cap changes are estimated to mean around 7,000 more people will be eligible for the grants, she says. The grants provide up to $10,000 per buyer if they meet the KiwiSaver criteria and withdraw from their KiwiSaver funds for a first home.
Real Estate Institute chief executive Jen Baird said the changes to grants and loans better reflect market reality and will be good news for weary first-time home buyers.
The changes will give them the confidence to reconsider their opportunities, she says. “But managing tighter lending criteria, along with rising inflation, global economic uncertainty and rising interest rates will remain a challenge for some buyers.”
First Home Buyer Club director Lesley Harris said the lifting of grant caps is a positive step, but it’s disappointing that the government hasn’t just scrapped them altogether.
“It doesn’t materially change anything for most people. This is because the grants are only $10,000 and people still have to make deposits well over $100,000.
“There are a few more people who will now benefit from this which is great, but for the most part the struggle remains as it is so difficult to save the necessary deposit.”
And mortgage brokers say the fact that income caps remain unchanged could mean it will be difficult for many people to access grants. People must earn less than $95,000 as a single person or $150,000 as a couple to qualify.
But for buyers who benefit from the higher subsidy caps, what can they now buy in the main centres?
In Auckland, grant caps have increased to $875,000 for existing and new properties.
But the Real Estate Institute put the area’s median price at $1.17 million in April, and analysis by Homes.co.nz found only four suburbs had a median HomesEstimate below the new cap. price of $875,000.
These suburbs are Eden Terrace with a median of $847,909; Manukau, $733,034; Graton, $564,144; and Auckland Central, $549,718. In each of these suburbs, it is mostly apartments that do the trick.
An example is a two-bedroom apartment on Anzac Avenue in Auckland Central. It has a large balcony, newly installed kitchen and storage space. It is listed for $759,000.
Another is a one bedroom apartment in an art deco boutique block on Brighton Road in Parnell, just up from the CBD. It is priced at $630,000.
Or there’s a one-bedroom apartment in the nation’s tallest apartment building, the upscale Pacifica. It costs $852,000, but the resort has a heated pool, gym, media room, terrace lounge, and barbecue area.
But properties listed below the caps can be found in the area’s suburbs. These include existing units, townhouses and apartments, as well as new developments. A new example of construction is The Green on Woodglen in Glen Eden. It has townhouses and duplexes starting at $749,000.
Wellington now has a cap of $750,000 for existing properties and $925,000 for new construction. These ceilings are closer to the median price for the region, which was $930,000 in April.
But it still has just five suburbs with a HomesEstimate median below the new caps, according to Homes.co.nz. These are Pipitea with a median of $278,751; Wellington Central, $510,406; Glenside, $712,825; Te Aro, $774,308; and Grenada North, $878,421.
Again, it is apartments and townhouses that make up the majority of below-the-cap priced properties.
An example is a one bedroom apartment in the historic Bond Store building on Egmont Street in Te Aro. It was recently renovated and strengthened against earthquakes, and costs $690,000.
Another is a two bedroom apartment in The Terrace in Wellington Central. It was recently renovated and listed for claims over $465,000.
In Tauranga, the cap was raised to $800,000 for an existing property and $875,000 for new construction, while in Hamilton it was increased to $650,000 for existing properties and $725,000 for new builds. new constructions.
But in Tauranga, only five suburbs have a median HomesEstimate below the city’s new caps, and in Hamilton, only four have, according to Homes.co.nz.
An example of an existing property listed at a suitable price in Tauranga is a two-storey, three-bedroom house on Bell Street in Judea. It has a large section of 1084 m² and a double garage, and costs $800,000.
In Hamilton, a Frankton property is an example of what can be found under the ceiling of existing properties. The three-bedroom house on Bandon Street has a patio and a carport, and is listed at $549,000.
In the south, prices are more affordable, with the Real Estate Institute putting Christchurch’s median price at $710,000 and Dunedin’s at $640,000 in April. And the ceiling changes mean they have more options for first-time home buyers.
In Christchurch the caps have been raised to $550,000 for existing properties and $750,000 for new builds, while in Dunedin the caps have been raised to $500,000 for existing properties and $675,000 for new constructions.
Information from Homes.co.nz shows Christchurch now has 47 suburbs with a HomesEstimate median below the new caps, and 13 of these have a median below the cap for existing properties. These suburbs include New Brighton, Sydenham, Belfast, Bryndwr, Papanui and Saint Martins.
There are properties of all types available listed for prices below both caps. But an example of an existing property is a three-bedroom house on Caithness Street in New Brighton. It has a terrace, a double garage and a section of 609 m² and costs $550,000.
In Dunedin there are 29 suburbs with a median HomesEstimate under the new caps. They include Maia, Portobello, Abbotsford, St Kilda and Mornington.
Although only one of these suburbs has a median below the existing property cap, it is possible to find properties below the existing property cap in many suburbs.
An example is a three bedroom house on Leckhampton Court in Clyde Hill. Listed at $445,000, it is on an 848 sq. ft. section, and features a double garage and ocean and city views.