By Nidd Realty sales consultant Graeme Pennell

The Government’s Budget changes to its housing loans and grants have been described by one Dunedin mortgage broker as a “whole new lifeline” for first home and other buyers. 

Sandra Spence (pictured), Affinity Mortgage Advisors director, said the changes, removing altogether property price caps for Government loans and increasing the sale price caps for Government first home grants, opened up a “whole new stream” of business with buyers who previously would not have qualified. 

In Dunedin the first home buyer price cap to qualify for a Government grant has been lifted from $400,000 to $500,000 for existing property and $675,000 for new builds. 

“This is still unrealistically low,” Ms Spence said, but it would provide help for some first home buyers in the lower price bracket. 

It was important to note the two areas of changes provided by the Government’s housing agency Kainga Ora*   – one for the grant scheme and the other for loans. Initially, after the Budget announcement there was some confusion. 

Tighter lending conditions, following the Credit Contracts and Consumer Finance Act introduced from December 2021, and rising interest rates have resulted in fewer first home buyers in the market in recent months amid a wave of negative sentiment nationally. 

But Nidd Realty principal Joe Nidd believes the Budget changes could help free up the tight Dunedin market, allowing more first home purchases which could flow on to more sales in higher price brackets. 

“It’s definitely a positive move,” Mr Nidd said “and, with relaxation of CCCFA lender requirements already signalled, could provide fresh impetus to the housing market.” 

For further information, visit the Ministry of Housing and Urban Development website https://www.hud.govt.nz/

*Kāinga Ora, a Crown entity, was formed by the merger of Housing New Zealand with its development subsidiary Homes, Land, Community (HLC) and the KiwiBuild Unit from the Ministry of Housing in October 2019.