While we continue to hear stories of the rising cost of housing and difficulties for first home buyers in other parts of New Zealand, here in Selwyn housing has gradually become more affordable since 2009, according to figures from the Ministry of Business, Innovation and Employment (MBIE).
Unfortunately MBIE figures were not yet available for 2017, but housing affordability in the region dropped from a peak of 74.5% in 2009 to 55.4%, well below the overall New Zealand figure of 77.5% for 2016. The percentage relates to the number of renting households that would have a residual income after housing costs of below the national median, so (while it is a little tricky to get your head around) the higher the percentage figure, the less affordable housing is in that region.
From my perspective, the availability of land and large number of new homes being constructed here in Selwyn since 2009 have all contributed to this situation. It is a classic case of supply and demand working well.
Another factor that has contributed to housing affordability in the region is the previous Government’s policy of making grants available for first home buyers through the Kiwisaver Homestart Grant scheme.
During the period January to March 2018 a total of 118 Kiwisaver HomeStart Grant applications were approved in the Selwyn District and 93 grants totalling $690,000 were paid out. These grants enabled the purchase of 59 properties.
This trend of more first time buyers getting into the market has been seen across New Zealand. According to the Property Institute, over a third of those securing mortgages in March 2018 in the greater Christchurch area were first home buyers. This makes first home buyers by far the largest group of new mortgage customers locally, compared with those refinancing at 19.4 per cent; investors at 17.7 per cent and those moving house at 11.3 per cent.
For those looking to use Kiwisaver to secure their first home, it is important to note that there are two Kiwisaver products available for first home buyers. The Kiwisaver HomeStart Grant is administered by Housing New Zealand, while the ability to withdraw Kiwisaver funds for a deposit through the Kiwisaver FirstHome Savings Withdrawal scheme is administered by Kiwisaver providers.
ANZ reports that it has seen a near five-fold increase in the number of borrowers using KiwiSaver funds for a home deposit, with about 40% of first home buyers using KiwiSaver to finance a deposit in the year to September 2017.