More Maori could enter the home ownership market, push for a first home buyers matched grant, shop a
More Maori could enter the home ownership market, push for a first home buyers matched grant, shop around for a better deal
New Zealand Maori Council pushed further into housing policy
The New Zealand Maori Council has welcomed the removal, for the next twelve months, of the loan to value ratio that could see more Maori being able to afford their first home. Council Executive Director, Matthew Tukaki, and Chair, Henare Mason, first raised the prospect with Reserve Bank Governor Adrian Orr and officials last year. The Loan to Value Ratio is a restriction bought in during 2013 restricted bank lending to people to 10% of the institutions new mortgages by value to people with less than a 20% deposit – this impacted people on lower incomes and those who were struggling to save smaller deposits of 5%.
“This is an important move because we could see a lift in first home ownership among Maori who have been previously restricted. House prices have been increasing across the country for years now and as they increase so does the value of a deposit. If a three-bedroom home in Auckland had an average house price of $850,000 a deposit of $170,000 would have been needed. The average house price in New Plymouth is around $475,000 which would have required a deposit of $95,000. This essentially locks younger first home buyers out of the market.” Tukaki said
“What we might see is a tighter market and house prices coming down which should benefit those looking to buy their first home. This could see hundreds if not thousands more Maori entering into the homeowner market for the first time – and the Maori Council actively encourages that. To be frank I would rather people being a mortgage payment for their own asset than rent on someone else’s.” Tukaki said
“What I do think the next step should be is to look at a first home owners grant where a smaller deposit will still be needed of up to 5% but the Government matches it by a further 5% to take it to 10%. These schemes are highly successful overseas in places such as Australia and a huge amount of value in terms of the asset base of those on low to middle incomes. More importantly it gives a hand up to our young first home buyers as well as others who may still be in their middle years but stilling renting.” Tukaki said
“In the coming weeks the Council will be turning its attention to also advocate a lowering of credit card interests, which remain stubbornly high on average of between 19-20% - now is a good time for those struggling to shop around and get a better deal by transferring your balance to another card on a lower rate and monthly fee.” Tukaki said