Bay first home buyers have withdrawn more than $61.6 million from KiwiSaver in one year while those facing hardship took out $6.3m, new figures show.
Financial experts say the scheme is the only way some Kiwis would get on the property ladder because "for most people, it is the only savings they will do in their life".
Meanwhile, social agencies believe poverty and Covid-19 have forced others to cash up early and sent some clients "over the edge".
Spiralling house prices also meant KiwiSaver was a great springboard but first home buyers were still coming up with innovative ideas to raise a deposit, a real estate specialist said.
Figures supplied to NZME under the Official Information Act also show nationally more than $1.1 billion and $126 million respectively has been withdrawn in the 2019/20 financial year.
Inland Revenue customer and compliance services individuals segment management lead Sharyn Rea said KiwiSaver was a voluntary savings scheme set up by the Government to help New Zealanders save for retirement.
But savings could be withdrawn to buy your first home or for significant hardship.
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said the company had seen an increase of first home buyers across the Bay of Plenty region.
During the past 12 months, they had been successful in negotiating their way into homes but there were challenges.
"The property prices and quality of homes they are looking at is higher so it's harder for them to find a deposit even with KiwiSaver. Typically your level of income affects your ability to get a mortgage and buy a property."
But first home buyers had become innovative and sometimes parents were buying the properties for their children, he said.
OneRoof editor Owen Vaughan said KiwiSaver was a vital component for first home buyers and new entrants to the market.
"It has become one of those key features and with interest rates being so low and for people that may have been waiting or holding off to get their deposit in line it might enable them to get into the market.
"Kiwis kind of dream about getting into their own home and KiwiSaver is a key to that."
The latest Real Estate Institute of New Zealand's figures revealed Tauranga's median house price reached a record $780,000 and Rotorua's climbed above half-a-million dollars to $521,000.
Rapson Loans and Finance owner Chris Rapson was an advocate for KiwiSaver and said "for most people, it is the only savings they will do in their life".
Helping first home buyers into properties also boosted the local economy and gave him optimism.
"It's really beneficial savings.
"In essence, it's for a common cause because it leads to homeownership and that is a really good thing. I am a great believer in benefits to the community of the high level of homeownership instead of renting."
On the flipside, poverty takes no prisoners, although he thought some people had used the hardship opportunity as an easy option to withdraw due to Covid-19.
"But I don't have to walk in their shoes. They may have asked here in Covid how do I survive? This is one option and I am going to take it."
Tauranga Budget Advisory Service manager Shirley McCombe said it had a big increase in numbers wanting to withdraw money from KiwiSaver as well as Debt Repayment Orders and No Asset Procedures in the past two months.
"Many of those we see were just managing before Covid and reduced hours, additional expenses, etc, have been enough to send them over the edge.
"Most of our clients want to use their KiwiSaver to address debt, particularly rent arrears, but first we look for options and try to address the underlying issues. We have had several clients withdraw money to purchase a vehicle.
"Sometimes because their vehicle is not roadworthy and has no WOF or registration, they are constantly fined and this is a growing cause of debt, some live in their cars and for others, a car has enabled them to work."
Rotorua Budget Advice manager Pakanui Tuhura said the KiwiSaver hardship grant allowed people to maintain their current standards of living.
It meant they could reduce debt and stress in the household while providing "temporary breathing space to reorganise lives to fit reduced income or seek other income".
The Salvation Army's Social Policy Analyst Ronji Tanielu said the danger with accessing KiwiSaver for hardship was it put pressure back on that person or whānau in the long term regarding their future retirement plans and buying a first home.
"Accessing it now in the short term could jeopardise their long term financial wellbeing."
The hardship it was seeing was "normal" but quickly changing in his view.
"We have the normal/regular clients [such as beneficiaries, lower-income earners] who regularly use our various services and whose situation hasn't changed that much during/after Covid. But we have new clients [11,000 nationally during the original level 3 and 4 lockdown] who have never previously received a food parcel from us or used our other services.
"The face of hardship is changing."
KiwiSaver withdrawals in the Bay of Plenty
2019-20: $61,619,138 in 2385 withdrawals
2018-19: $56,170,159 in 2445 withdrawals
2017-18: $40,096,756 in 1953 withdrawals
2019-20: $6,357,759 in 1005 withdrawals
2018-19: $5,522,517 in 904 withdrawals
2017-18: $5,399,654 in 925 withdrawals