The Government's decision to axe first home buyers' grants is "the final nail in the coffin" for those wanting to buy their first house, according to First Home Buyers Club director Lesley Harris.
Housing Minister Chris Bishop announced at Parliament yesterday that the money would be shifted to fund about 1500 new social housing places to be provided by external organisations instead of Kāinga Ora.
Existing applications would be progressed but no new grants would be accepted, effective immediately.
Meanwhile, the Finance Minister has revealed there are more cuts to Government services to come after this year's Budget. (Source: 1News)
The First Home Loan scheme — which allowed for 5% deposits — and allowing first home buyers' to access their KiwiSaver funds for their house deposit, would remain.
The 2024 Budget would allocate $140 million in new funding for the social housing spots — all money from ending Kāinga Ora's First Home Grants.
Speaking to Breakfast this morning, Harris said the decision would be a real kick in the guts for some Kiwis trying to get on the property ladder.
"We know that it takes on average about nine years now to save for the average house deposit for a first home buyer. For a lot of people, that's going to mean an extra year or two savings so it's really really disappointing for a lot of people — it makes a tough journey for some people quite a bit tougher."
Asked if she thought it would stop people from buying their first home all together, Harris said the extra $10,000-20,000 for a couple might make all the difference.
"I think it's a little bit unfair to say they can still get into homes, for a lot of people it will be that last nail in the coffin, there are so many hurdles to go through. It's just disappointing — it's a kick in the guts."
"Are we wanting Kiwis to get into their first homes or not? The message just isn't great really that this has just been scrapped and there's nothing to replace it."
Labour MP 'lost sleep' over announcement
Labour MP Kieran McAnulty says he lost sleep over home grant axing announcement yesterday.
Speaking to Breakfast this morning, McAnulty said the decision is a broken promise and people are hurt.
The Labour MP said the decision is a broken promise and people are hurt. (Source: Breakfast)
"When Christopher Luxon says he's not going to scrap the home loans grant, that's a guarantee to New Zealanders that he's now walked back on, it's a broken promise and it's hurt people.
"It means that it'll delay their chances of buying a home at least by a year. If house prices go up more than wages go up, or their ability to save, then it'll be longer and any tax cuts they get in the budget won't compensate for the thousands of dollars they've lost that would get them across the line.
"Anybody that's saved for a home knows that getting to the line the can do, but getting over the line, given all the different circumstances, that's the hard bit and that's why this home grant was so important to these people and now it's gone."
More important priorities — Housing Minister
Yesterday Bishop said: “The Government has made a deliberate choice to reprioritise low value expenditure to more important policy priorities. At a time when the waitlist for social housing is over 25,000 applicants, we have made the tough but necessary call to focus support on New Zealanders who need it most."
He said the First Home Grant — which provided eligible first home buyers with a median of $5000 towards a house deposit — was "an expensive and inefficient way to support first home buyers".
Labour leader Chris Hipkins said the Government was "tilting the playing field" towards property investors instead of Kiwis pursuing their dream of home ownership.
"This Government are shattering the dream of home ownership for an entire generation of New Zealanders whilst give $2.9 billion dollars worth of tax cuts to landlords. They're cutting one of the schemes that a lot of New Zealanders rely on to get that deposit together to buy their first home."
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