First home buyers

PHOTO: First homebuyers. FILE

Kāinga Ora has been forced to halt applications for its First Home Partner programme due to an overwhelming surge in demand. This initiative provides an alternative avenue for first-time homebuyers to enter the housing market.

Eligible first-time buyers, with a household income of up to $150,000, can apply if they can muster a 5% deposit for the house they intend to purchase. Kāinga Ora then steps in, taking a stake of up to 25% or a maximum of $200,000 (whichever is lower) to help reduce the amount of money the buyer needs to borrow.

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Nick Maling, the General Manager of National Services at Kāinga Ora, explained that recent changes expanding eligibility to include existing homes and raising income caps had led to an astounding 450% increase in monthly applications for the program, causing it to reach full capacity.

Maling stated, “We are currently in the process of handling the substantial volume of pending applications at various stages and will be contacting all applicants soon. In the interim, we encourage prospective homebuyers to explore the array of other homeownership products administered by Kāinga Ora, such as First Home Loans and First Home Grants.”

Recent data from Kāinga Ora has shown a significant uptick in applications for First Home Grants and First Home Loans during the June quarter. The number of grant applications rose from 6,854 to 8,213, while approved First Home Loans increased from 1,289 to 1,701 in the March quarter.

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Mortgage adviser Jeremy Andrews acknowledged this shift, noting, “In my previous seven and a half years as a mortgage broker, I had only processed two Kāinga Ora First Home Loans for clients as a last resort. However, with changes to eligibility and various benefits introduced over the past couple of months, I’ve processed eight more First Home Loan or First Home Partner applications during that time.”

He also emphasized that buyers should carefully weigh their options, as sometimes a First Home Loan or First Home Grant may be more suitable, depending on their circumstances.

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