New housing package will 'make life harder' for Pasifika first-home buyers and renters

March 24, 2021


Photo/RNZ

By Elijah Fa'afiu - elijah.fa'afiu@pmn.co.nz

The founder of a home ownership group is claiming the government's housing package will "make life harder" for Pasifika first-home buyers and renters.

Home Ownership Pathway works with Pasifika families wanting to enter the housing market, helping them with financial capability and mortgage readiness.

Its CEO Andrew Lavulavu says targeting landlords will have an unwelcome ripple effect on renters as well.

“The government really needs to take a step back and say well, landlords are actually here to help us. They’re providing homes, they’re providing a service and most of them I would think are running it like a business.

“To strategically go after them and call out this tax loophole, what the outcome for Pasifika will be over the next 12, 24, 36 months will be a huge dramatic increase in rent. That’s going to affect where we’re living.

One of the government’s new measures include raising the income caps to enable single people and two or more buyers to get help from the First Home Grants and Loans funds.

From 1 April, for single buyers, the income cap is increased from $85,000 to $95,000 and for two or more buyers, it’s lifted from $130,000 to $150,000.

Under the First Home Loan scheme, if people earn less than the income caps, they can receive a home loan with just a 5 per cent deposit.

But Andrew Lavulavu says increasing the income caps creates a larger pool of demand for houses.

“We’ve opened it up to about 20 or 30 per cent of people who can now access the grant. We’ve got more buyers in the market. 

“We’ve got less supply where the landlords are holding on to their properties and more demand, which means prices increase.”

Lavulavu says Pasifika families will bear the brunt of the increase in rent costs.

“Who do you think the landlords are going to pass the costs onto? Are they going to pay them or are our families going to pay them?

“We’re going to see seven, eight, nine hundred dollar per week rent and then we’re all going to try and squeeze our families into two, three bedroom existing homes, just so we can save enough money to get onto the ladder.”

The bright-line test has also been extended from five years to 10. 

This means anyone who sells a property that is not their primary residence within 10 years of buying, will have to pay tax on the profits from March 27.

New builds will remain under the five-year rule.

Home Ownership Pathway CEO Andrew Lavulavu. Photo/Pasifika Futures


Former Council building inspector welcomes housing acceleration fund

A former Auckland Council building inspector has welcomed the government’s $3.8 billion Housing Acceleration Fund.

Seminati Pulu says any funding going towards infrastructure is helpful.

“There will never be enough money for anything, but I think it’s a start.

“I think in five year’s time, we’ll start to see the benefit of it.”

The Housing Acceleration Fund will speed up the pace and scale of house building by paying for any critical infrastructure needed for housing developments.

The number of houses built will depend on council zoning changes and buy in from the local sector including councils, iwi, property developers and the not-for-profit sector.

The government also extended the Apprenticeship Boost initiative by four months to further support trades and trades training.

Seminati Pulu says apprentices should be a top focus when talking about housing.

“A big part of the infrastructure is training the skilled people. If the money’s available and you don’t have enough skilled people, who’s going to do the work to build those houses?”

Pulu says getting more apprentices will support the trades industry as a whole.

“When the housing development starts to slow down, those people can go and work for other companies, maybe even start up their own business.”

Since its launch in August 2020, the Apprenticeship Boost initiative has seen more than 10,000 employers sign up and receive almost $97 million in subsidies for more than 21,000 apprentices.