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Auckland woman calls for housing 'system' shake-up as she struggles to buy first home in hot market

An Auckland woman who's a prospective first home buyer is calling for the Government's housing grant cap to be raised as it becomes "seemingly more and more impossible" to enter the market.

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Monique Bajwa says buying her first home is “seemingly more and more impossible”. Source: Breakfast

New Zealand is seeing its lowest home ownership rate in 70 years, and to help tackle the issue, the Government introduced the First Home Grant scheme to help Kiwis buy a home, even if they had just a 5 per cent deposit.

Under the grant, a hopeful homeowner can access up to $10,000, or $20,000 per couple, to top up their deposit. However, people can only apply on their own if their income is below $85,000 in the past year, or have a combined income under $130,000 in the past year for couples.

There is also a regional price cap on houses you are allowed to purchase under the First Home Grant, including $600,000 for an established home in Auckland, or $650,000 for a new build, despite the median price for a home in the city being over $1 million.

Last November, the Government said it was looking to adjust the earnings threshold but there has yet to be any progress.

Auckland mother and prospective home buyer Monique Bajwa is looking for a two-to three-bedroom home for herself, her husband and their two young kids but said there was "not much available under the cap price" in their area. 

Bajwa told Breakfast the young family had even considered relocating to Christchurch to find a home, but “with Covid at the moment, job security, we just couldn’t really move at the time”.

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She said despite having savings set aside and her husband having a good income, a mortgage broker told the couple they need to “increase our income in order to make repayment.”

“The option at the moment for us has been for me to go back to work and it is a tough decision, as a mum, to put your two-year-old into full-time care and it’s a difficult decision, I think, for most mums, but I think it’s something that’s happening all throughout Auckland now,” she said. 

People can get the First Home Buyers Grant scheme must also be able to earn enough to make the repayments for the house they are looking to purchase.

Bajwa said her and her husband are “absolutely not” able to find any homes under the $600,000 cap, adding that while they have been looking at homes on TradeMe for several months, their closest option is a two-bedroom townhouse under construction selling for $700,000.

Apartments were also considered as an option, but they “sold so quickly, you have to basically get in there within a week,” she said. 

“I think it kind of leaves you in a place where you feel stuck as to what is available and how you’re going to basically move ahead with your family and purchasing your first home.”

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Bajwa, who is 36, called it “a time in your life where you hope to have things a bit more prepared so that you can kind of move on to fulfilling some other dreams”.

“But now we’re 36, it means that for the next 30 years, I’m going to be paying a mortgage – not just buying a house, but you’re buying a mortgage – and that mortgage needs to be repaid, and so it’s a lifetime of debt that you’re hoping will turn into wealth and provide for your retirement."

She said her parents bought their first home at 21 while she is attempting to buy her first home now. 

“In one generation, we’ve gone from buying a home early in your 20s to now looking, really, realistically buying a home in your 30s.”

She said “most working people understand that it requires discipline and patience to build wealth and to save and to work towards an achievement – not just buying a house" but “we’re at a point where it’s just not working anymore".

"We have to look at what the system is allowing us and is there an opportunity to re-evaluate and come up with some other options, either to increase the cap price which allows us to enter the market or to look at a different way of doing it."

Bajwa said the Government will be re-evaluating the price cap in a year and a half, which she called “just too long.”

“The house prices are going up so fast and if you don’t get in quickly, it’s just going to be seemingly more and more impossible.”