What kinds of homes qualify under the new First Home Loan and First Home Grant spending caps?

The Government on Tuesday announced new caps on how much a buyer can spend on their first home and still qualify for a First Home Loan and First Home Grant.

According to Housing Minister Megan Woods, the new caps are based on the median figure in the lower-quartile of recent sales – suggesting the bottom eighth of properties would qualify.

So what exactly can you get in Auckland, Wellington, Hamilton, Christchurch and Queenstown? Let’s take a look.

Auckland

A quick search on Trade Me’s property site (excluding sections and bare land) brings up about 1300 places under the spending cap on existing properties – $625,000. But many of them aren’t below that at all – the top hit, for example, asks for “enquiries over $1.4 million”, the second actually costs $1.13 million, and so on.

Most are also listed as “price by negotiation” or “to be auctioned”. Auctions create “irrational behaviour” Reserve Bank Governor Adrian Orr told The AM Show in February, leading to inflated prices, so let’s ignore those.

The first place that comes up at $625,000 – on page 14 of the search results – is a two-bedroom apartment in Mangere that hasn’t been built yet. Since most banks require much larger deposits for apartments than they do on other types of housing – up to 50 percent in some cases – it’s unlikely this place will be looked at by anyone looking to take advantage of the First Home Loan or First Home Grant.

The next place up with a qualifying price tag is a three-bedroom townhouse in Clarks Beach, Franklin. While the sales pitch says it’s “exclusive to first-home buyers” and “just 20 minutes from the motorway”, it’s also a two-hour drive at rush hour to the Auckland CBD. If you work in Papakura, it’s still a 45-minute drive on weekdays.

It is close to the beach, mind you.