Budget 2022 brings welcome support for first home buyers

First Home Buyers Written by Squirrel, May 20 2022

Not that long ago, the New Zealand housing market was a pretty hostile place for first home buyers.

But things have started to swing in their favour in recent months. Between softening house prices, and record levels of residential construction, we’ve seen choice return to the market, and (increasingly) there are some good deals to be had.  

And this week’s Budget announcement has brought more good news – with the Government unveiling details of a number of key changes that will unlock additional (and much-needed) support for the first home buyer market.

1. A healthy increase in house price caps for Kāinga Ora’s First Home Grant programme

Kāinga Ora’s First Home Grant programme helps eligible first home buyers bulk out their house deposit, by offering a government contribution of up to $10,000 per person (or $20,000 for a couple)*.

Eligibility for the grant depends on a few different things.

  • You must have contributed at least 3% of your income to a KiwiSaver scheme for at least three years;
  • You must be planning to live in the house for at least six months;
  • You must have a single income up to $95,000 or a combined yearly income of $150,000 or less (before tax) for two or more applicants;
  • And you must be buying or building a house under the regional house price caps.

And it’s that last point which has changed for the better with this week’s Budget announcement.

House price caps have been increased across large parts of the country – bringing them in line with regional lower quartile house prices, after a period of bumper price growth across New Zealand’s housing market.

In Auckland, the new cap now sits at $875,000 for both existing properties and new builds, up from $625,000 and $700,000 respectively. And across other major centres, the new price caps are as follows:



Existing properties

New builds
















Rest of NZ

From $400,000 - $875,000

From $500,000 - $925,000


More detail on price caps for the rest of New Zealand can be found on the Kāinga Ora website.

These changes have come into effect immediately, offering more support and greater choice to Kiwis hoping to get settled into their very own first home.

* Note: Just how much you can get for your First Home Grant is determined by how long you’ve been in KiwiSaver, and whether you’re buying an existing property or buying / building new. Check out Kāinga Ora’s website for the specifics.

2. The removal of house price caps on Kāinga Ora First Home Loans

The First Home Loan programme is designed to make it easier for first home buyers to get into their own home, by helping them to buy with little as 5% deposit saved.

Kāinga Ora underwrites the loans, and works with a select group of banks and other lenders to coordinate funding.

In an environment where that golden 20% deposit has felt increasingly out of reach for many, and tightened LVR restrictions have made life that much harder for low-deposit borrowers, it’s a unique solution for those who would struggle to meet traditional lending criteria.

Previously, to be eligible, you had to (among other things) be looking at buying a house valued at less than those regional house prices caps we mentioned earlier.

But, as of Wednesday 1st June, those caps will no longer apply, significantly increasing choice for eligible first home buyers.

For more information about the programme, and eligibility, check out Kāinga Ora’s website.

3. More regular reviews of price and income caps moving forward

Finally, and appropriately given the ever-changing state of our housing market, the Government have committed to reviewing the house price and income caps on a six-monthly basis – ensuring they stay more up-to-date.

Want to chat to an expert about whether you could be taking advantage of these new rules? Call us on 0800 21 22 30, or fill in our online application.

The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Squirrel shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. We recommend seeking professional investment and/or mortgage advice before taking any action.

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