Paul Sewell asked for views on Hawkes’s Bay First Home Buyers, HB Today

 

Hundreds take step on to housing ladder

Government loans aimed at helping New Zealanders buy their own homes are proving popular, Catherine Gaffaney reports in the second part of our five-week investigation into getting a foothold on the property ladder. And a loosening of restrictions is making it even easier.
Financial Advice Hawke's Bay co-director Paul Sewell said the loans were an excellent way for home buyers to get into the market. Photo / Getty Images
Financial Advice Hawke’s Bay co-director Paul Sewell said the loans were an excellent way for home buyers to get into the market. Photo / Getty Images

Hawke’s Bay first-home buyers have borrowed more than $140 million through the Welcome Home Loan scheme since it began.

Housing New Zealand figures show 736 first-home buyers in Hawke’s Bay were granted a total of $142,963,000 in loans since the scheme launched in 2003. The average loan was $194,243.

As of May 31, more than $14 million had been lent to 73 local first-home buyers this financial year.

Welcome Home Loan is a scheme run by Housing New Zealand to help first-home buyers secure loans. Prospective buyers can borrow up to 90 per cent of a property’s value. Selected banks and credit unions loan the money.

To qualify for the 10 per cent deposit loan, borrowers have to have earned less than $80,000 in the previous 12 months as an individual, or $120,000 as a couple.

Borrowers must intend to live in the property rather than buying it as an investment.

Financial Advice Hawke’s Bay co-director Paul Sewell said the loans were an excellent way for home buyers to get into the market.

“They’re a powerful tool to assist those who might not be able to otherwise buy their first home,” he said. “They also help those who are to buy a home to get into the market earlier.”

KiwiSaver also fed well into the scheme, he said.

“Cashing in on KiwiSaver can be a great way to make the 10 per cent deposit.

“If a Hawke’s Bay couple on $50,000 each contribute to KiwiSaver for five years, they could potentially have $15,000 to $20,000 each to contribute to a deposit.”

Welcome Home Loan’s house price cap in Hawke’s Bay is $350,000.

Price caps vary for each region, with the highest of $550,000 in Auckland. The rest of the country is capped at between $350,000 and $450,000.

Roost mortgage broker Paul Richardson also said the loans weren’t one-size-fits-all.

“It’s positive that they can help people get around the Reserve Bank’s [loan-to-value ratio] restrictions but, like anything the Government does, there’s rules and restrictions,” he said.

“The price caps may have gone up but it’s still proving hard for a lot of people to get into their first home.”

Nationwide, more than $2.4 billion has been lent to more than 12,000 first-home buyers.

As of May 31, more than $220 million had been lent to 965 buyers this financial year.

Hawkes Bay Today

June 26, 2015