Government’s Housing Policy Changes
Initial thoughts following the Government’s announcement of integrated measures to build new homes, freeing up land for residential development and infrastructural investment.
First Home Loan & Grant:
- Good news that the maximum yearly income for a single person has increased 11.7% to $95,000 and combined maximum incomes increased 13.35% to $150,000.
Price Caps for Homes:
The First Home Grant can be used to help purchase new builds with the total combined costs for the land purchase and the house construction to be within the relevant house price caps. For Southland the cap is $500,000. New build properties include:
- Newly built dwellings that received a building code compliance certificate less than 12 months before the date, you apply for the First Home Grant
- Vacant sections that will be built on
- House and land packages purchased off the plans
Housing Acceleration Fund:
- $3.8 billion to speed up housing developments. To leverage benefits across our region is very much dependent on the supply response from local and regional councils and the private sectors to make available residential land and build opportunities at affordable price points. The Bright-line Test for new builds remaining at 5 years represents a tangible benefit for those seeking a healthy home constructed to the new building code.
- Further economic value add for our region derived from a busy construction sector and employment through targeted skills-based training would also sit in the good news column.
Extending the bright-line test from five to ten years for second/investment properties:
- This is where it gets interesting for many people who have saved to have sufficient equity to purchase a second property to reflect their financial position, stage of life or overall financial goals.
- Investors will likely not over react, and take time to consult and validate their strategy to buy.
- Recalibrating thinking for a longer hold is not all bad, as it’s well known in both property and shares, the long-term investors are the ones who succeed achieving their goals.
- Holding rental investments for a minimum ten years would likely create the need for owners to maintain their property asset beyond the base of simply meeting compliance for the five Healthy Homes Standards to rent the property.
- Whether or not tenants become unwitting pawns, and left paying the price for these changes we hope does not play out in our region.
From a Government standpoint, you don’t eat the vegetables planted today, so only time will tell how the new measures deliver good news for first home buyer’s and non-owner property occupiers.