The Kākā by Bernard Hickey
Choosing landlords and the homeless over first home buyers

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Choosing landlords and the homeless over first home buyers

Govt swaps first-home-buyer grants for social housing subsidies & tax cuts for landlords; RBNZ says will keep interest rates high until late 2025 due to sticky rents, council rates & insurance costs
The Government may struggle with the political optics of scrapping assistance for first home buyers while also cutting the tax burden on landlords, increasing concerns over the growing generational divide. Photo: Lynn Grieveson / The Kākā

TL;DR: The Government confirmed it will dump first home buyer grants in the Budget next week to save $240 million over four years, using $140 million of that to pay for 1,500 extra social homes provided by Community Housing Providers (CHPs). The rest will pay for tax cuts, most of which will go to rental property investors.

The coalition may struggle to overturn the political optics of scrapping a cash handout for middle-class first home buyers that will help pay to house the homeless and lift the after-tax incomes of landlords.

Elsewhere, the Reserve Bank further delayed its forecast first cut in the OCR until late 2025, blaming higher rates, rents and insurance costs, none of which can be directly affected by higher interest rates. It risks bludgeoning home-owners a second time after they’ve already been hit with higher costs, which are party due to Government policies of shifting costs to councils and increasing migration.

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Here’s my top six ‘pick ‘n’ mix’ of links to news, analysis and opinion articles, announcements, official reports, reviews and research in the last 24 hours or so to 6:06 am on Thursday, May 23:

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