An increase in First Home Grant new build price cap minimum!

The New Zealand Government has introduced new price limits in various regions through its First Home Grant program, bringing potential first-time homeowners closer to realising their dream of building their own house.

Under this program, eligible first-time home buyers can receive a grant of up to $5,000 per person or $10,000 per couple to assist in purchasing a property. However, these grants are subject to specific conditions, one of which is the property price.

Dr. Megan Woods, the Housing Minister, has announced changes to the first home grants and loans to facilitate greater access to home ownership.

Overall, First Home Grant price caps for new build homes have increased in 37 areas. This will support the supply of new homes and means first home buyers in those regions who are looking to buy a newly built home will benefit the most.” explains Dr. Woods.

The lowest price cap for First Home Grants on new build homes is being raised from $500,000 to $650,000, with even higher increases in some areas. This adjustment acknowledges the escalating construction costs and expands the options available to eligible first home buyers, enabling them to choose between purchasing an existing home or a newly constructed one.

These new price caps came into effect on May 15th.

For instance, the following areas will have revised price caps for new build properties:

• Hamilton, Waikato, and Waipa will see an increase of $50,000, reaching $775,000.
• Hauraki District will experience a significant rise of $125,000, reaching $775,000.
• Matamata-Piako will have a cap increase of $175,000, reaching $800,000.
• The South Waikato District will witness a rise of $150,000, reaching $650,000.
• Rotorua will have its cap increased by $125,000, reaching $650,000.
• Whakatane will experience a substantial rise of $300,000, reaching $800,000.
• Taupo will see a cap increase of $250,000, reaching $825,000.
• Kawerau will have a cap increase of $25,000, reaching $650,000.
• Opotiki will experience a rise of $150,000, reaching $650,000.
• Christchurch will witness a cap increase of $25,000, reaching $775,000 for new builds.
• The Hurunui District will have a cap increase of $150,000, reaching $650,000.

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Additionally, adjustments have been made to the First Home Loan insurance premium.

Borrowers using the First Home Loan program are required to pay an insurance premium that covers the cost of underwriting their low deposit loan.

With the recent changes, this insurance premium has decreased to 0.5% of the total loan amount. For example, someone with a $600,000 mortgage will now pay $3,000 toward the insurance premium, down from the previous amount of $6,000.

If you are a first home buyer aiming to enter the property market, these measures are significant steps toward achieving homeownership.

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You can find a complete list of the updated price caps by clicking the link below:

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