There’s a bit to be positive about in the housing market right now (marking a nice change from recent years, if we’re honest). Changes to the Kāinga Ora First Home schemes, and amendments brought in to reverse the crippling impact of 2021’s new CCCFA legislation are both reason to rejoice.
Here’s what you need to know.
Changes to Kāinga Ora caps remove hurdles for more first home buyers
As part of the budget announcement in May, the NZ government brought in some fantastic changes to its Kāinga Ora First Home schemes, reflecting the major shifts that have taken place in the housing market in recent years.
First off, Kāinga Ora has introduced a third category under their income cap eligibility criteria, for solo income earners with dependents. This means solo caregivers are now eligible with earnings of up to $150,000 – the same as the cap for two or more earners, and significantly up on the $95,000 cap for an individual buyer.
→Related article: What is First Home Partner? All You Need to Know!
Kāinga Ora First Home Loans
The REAL gold for first home buyers is the removal of house price caps on Kāinga Ora’s First Home Loan scheme, which lends to borrowers who have as little as 5% deposit saved.
It’s underwritten by Kāinga Ora, working in partnership with a select number of NZ banks.
As the borrower, you have to pay a 1% low deposit fee, but otherwise get special rates from the banks. It’s a super competitive, well-priced home loan product that’s perfect for the low-deposit space (which has been really tough in recent months).
With the removal of house price caps, the only limit is around those income caps I talked about before.
As long as you fall under those, the First Home Loan Scheme is something that’s well worth looking into – as the recent changes have unlocked a whole lot more of the market (and therefore choice) for first home buyers around the country.
Kāinga Ora First Home Grants
Kāinga Ora’s First Home Grant program offers eligible borrowers up to $10,000 of free money (woohoo!) towards their house deposit.
The key change here is a significant increase on house price caps for eligible properties.
In Auckland, the cap’s been bumped up to $875,000 for both existing properties and new builds – up from $625,000 and $700,000 respectively – bringing a whole lot more properties within eligibility criteria (particularly terraced townhouses, if that’s where you’re looking).
The table below details regional house caps below for other main centres, or you can check out the Kāinga Ora website for an extensive list.
| Region | Existing properties | New builds |
| Auckland | $875,000 | $875,000 |
| Tauranga | $800,000 | $875,000 |
| Wellington | $750,000 | $925,000 |
| Hamilton | $650,000 | $725,000 |
| Christchurch | $550,000 | $750,000 |
Dialling back of CCCFA changes also making life easier
Things were dire in the immediate wake of the CCCFA changes being introduced, but it’s fair to say that lenders have gotten much better at navigating those changes in recent months.
And on July 7, a series of amendments were introduced to start formally winding back the unintended consequences of the new legislation, which will help make things a little bit easier still.
We haven’t got all the changes we were hoping for on this front just yet, but it’s a start. And the changes we’ve seen to date will certainly help to make it easier for first home buyers to get into homes.
John Bolton founded Squirrel in 2008. He is a former General Manager at ANZ, where he was responsible for the bank’s $60bn of retail lending and deposits. He has 10 years of senior banking experience behind him in financial markets, treasury, finance, and strategy, and is a director of Financial Advice New Zealand, the industry body for financial advisers. Check out Squirrel’s website for how Squirrel helps first home buyers, here.
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