State house subsidy for first home buyers
First time buyers in New Zealand will be given a subsidy of up to $20,000 to move into vacant state houses, Housing Minister Nick Smith announced today.
The new 'First Home' scheme will allow modest wage earners to be gifted a 10 per cent deposit, and would give them priority to purchase empty homes which are no longer needed by Housing New Zealand. This is an opportunity that has never risen before and it's popularity is predicted to be huge, with many people who previously could have never joined the property ladder actually being given an advantage to do so.
To be eligible, a buyer would have to earn $53,000 or less and commit to living in the house for a minimum of three years. There seems to be absolutely no catch, and this is an average salary in New Zealand and that which many people of the age to be wanting to own their own home will be on. Housing New Zealand would make a grant of 10 per cent of the property's value, up to a maximum of $20,000.
The First Home scheme will improve housing outcomes at both ends of the affordability spectrum. It will help modest income families in provincial New Zealand buy their first home. Something they previously would have either not been able to do or got into great financial difficulty and debt trying to. It will also free up capital from these surplus vacant properties to invest in new state houses in high demand areas like Auckland and Christchurch. It really is a win win situation for all.
Around 400 state houses will be put up for sale in total under the new scheme - 100 those in the next year. The largest number of vacant properties currently is in Northland and the central North Island which will be an ideal spot for those first time buying couples with the ambition of starting and raising a family with it being close to all amenities, industry and schools.
It is also predicted council rates will go down as the cost of keeping an empty property safe from vandalism and squatting as well as the general maintenance and upkeep is a real drain on funds.
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