The house price caps for the Government’s First Home Loan and Grant scheme haven’t changed for Palmerston North in five years, and there are only a handful of existing homes but no new builds on the market that will qualify for it.
Builders, real estate agents and mortgage brokers are labelling the Government’s First Home Loan and Grant scheme as useless, with unrealistically low price caps ruling out virtually every house on the market.
The sale price caps for houses that qualify for the scheme were raised in some areas in April.
However, Palmerston North and Manawatū, which fall under the “rest of New Zealand” category, experienced no change to its $400,000 cap for an existing property, and $500,000 for a new build.
Mortgage Connect broker Craig Seton said the First Home Loan and Grant caps haven’t changed for Manawatū since 2016, and due to the rapid growth in property prices few people have been able to access the scheme in those five years.
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“Pretty much everyone’s given up on it now, it’s really too unrealistic,” Seton said.
Real Estate Institute of New Zealand Manawatū spokesman Andy Stewart said there was virtually nothing on the market that would qualify for the scheme.
“It’s just ridiculous… our region has the lowest [house price] caps, yet we’ve got one of the largest growth markets in New Zealand. It’s just not fair for first home buyers.”
Out of 106 sales in May, only one house went for under $400,000.
A search on Trade Me this week for Palmerston North properties for sale under $400,000 netted eight results.
Four were for auctions that had closed, one was for a kit-set home that didn’t include land, and two were limiting enquiries to over $399,000. Leaving only one, two bedroom, home that’s listed price was under the cap .
Searching across the entire Manawatū returned two three-bedroom homes for over $340,000 and a two-bedroom home in Tangimoana priced “by negotiation”.
Homes.co.nz’s monthly property update estimated the average first home in Palmerston North cost $564,000 in June, and the average value of a house in the city at $661,000.
Paul Haydock, owner of Manawatū…