Upsurge in Kiwisaver funded first homes

First home buyers have withdrawn a total of $120.2 million from their KiwiSaver funds this year.
First home buyers have withdrawn a total of $120.2 million from their KiwiSaver funds this year.

The number of people tapping into their KiwiSaver funds to buy their first home has almost doubled in the last year.

Figures released today show 10,733 people drew on their KiwiSaver retirement savings to put a deposit on their first home in the year to March.

That is almost double the 5737 who did so in the year to March 2012, and a more than seven-fold increase on the 1274 who did so in 2011.

KiwiSaver members can withdraw some or all of their savings from the scheme to put a deposit on their first home, and may also be eligible for a Government first home deposit subsidy of up to $5000.

First home buyers have withdrawn a total of $120.2 million from their KiwiSaver funds this year, more than double the $57.2m withdrawn last year and a more than eight-fold increase on the $12.3m withdrawn in 2011.

The Government paid out 4488 subsidies worth $15.7m in the financial year to May, up from 3163 subsidies worth $9.5m in 2012 and 1071 subsidies worth $2.8m in 2011.

The subsidy consists of $1000 for each year a member is enrolled in the scheme, up to a maximum of five years.

Housing Minister Nick Smith the scheme was gathering real momentum in helping first home buyers get a deposit for their first home.

"We want New Zealand to be a country where owning your own home is an achievable aspiration and this seven-fold increase in two years is hugely encouraging," he said.

"My message to young people aspiring to own their own home is that KiwiSaver works. It is a very positive result that to date the initiative has provided $217.6m of people's own savings and government grants towards the purchase of a first home."

Revenue Minister Todd McClay said the marked increase in KiwiSaver members getting early access to their savings to help buy a first home showed the benefit of a practical and flexibly designed scheme.

The figures were released to coincide with the sixth anniversary of the KiwiSaver scheme today.

It comes a day before the introduction of new rules which will require KiwiSaver providers to publish consistent and comparable information about their funds.

Under the new regulations, KiwiSaver providers will have to publish quarterly and annual disclosure statements online.

Previously, there have been no specific reporting requirements about how KiwiSaver providers disclose information about the performance of their funds.

Commerce Minister Craig Foss said the new disclosure rules would give New Zealanders better information to compare KiwiSaver funds.

"KiwiSaver schemes will have to report on fund performance, fees, asset allocation and other matters in a simple and standardised form," he said.

"KiwiSaver providers will also need to publish the information in a consistent dataset that can be easily accessed."

The new rules were a pivotal step in continuing to improve investor confidence in the financial sector, Mr Foss said.

The first new disclosure statements are due to be published in mid-October.

- APNZ

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