The Government must revamp support for first home buyers in Nelson and Tasman, with support plummeting over the past year, National MP Nick Smith told Nelson Rotary in his annual speech last night.

“It is wrong that in the last year when house prices have soared by over 20% to a median of $720,000, making it even more difficult for first home buyers that Government support has dropped by over 30% in the last year.”

“The government scheme for first home buyers was introduced by Nick Smith when he was Minister of Building and Housing in April 2015. It provides grants of up to $20,000 for first home buyers to help fund a deposit, as well as enabling them to access their Kiwisaver funds. The scheme has since helped 80,000 New Zealanders into their first home, including 2500 in Nelson and Tasman.”

“The number of first home buyers assisted by grants from the scheme in Nelson and Tasman, has grown from 363 in 2016, to 415 in 2017, to 443 in 2018 and to 461 in 2019 but dropped to 335 in 2020. The value of scheme grants in Nelson and Tasman region has grown from $1,714,000 in 2016, to $1,028,000 in 2017, to $2,184,000 in 2018 and to $2,532,000 in 2019 but dropped to $1,725,000 in 2020.

“The scheme is failing because first home buyers just cannot find sufficient homes below the price cap of $500,000 for an existing home or $550,000 for a new home. These levels are just not realistic in the current market and as a consequence young people are being denied support.”

“The Government needs to take some responsibility for the record high jump in house prices. Its removal of the Loan to Value limits and providing billions of dollars of cash to banks last year has added fuel to the hot property market. It needs to correct these policies but it also needs to adjust house price caps of the Home Start scheme to give first home buyers a fair go.”

“Government support for first home buyers needs to increase and not decrease. These adjustments in the Home Start scheme should have been made last year when it was obvious that it was not working, but the change is now urgent, to unlock the property market to first home buyers."