More Northlanders than ever are using KiwiSaver to help them buy a home. Photo/File
More Northlanders than ever are using KiwiSaver to help them buy a home. Photo/File
Three Northland house hunters are withdrawing their KiwiSaver funds every working day to buy a first home.
In the last 10 months, 699 people across Northland have made a KiwiSaver first home withdrawal, Inland Revenue Department figures showed.
This was more than a quarter of all first home withdrawals (2458) since the scheme began 10 years ago. The savings scheme was launched in 2007 by then-Labour Finance Minister Sir Michael Cullen.
Most people could access their KiwiSaver funds only when they turn 65 - the same time as superannuation payments kicked in.
However, those looking to buy their first home, or suffering financial hardship, could apply to withdraw some savings. It was not available to those who already owned a home.
The Government also offered a HomeStart grant to eligible house hunters of up to $5000 to purchase an existing home, or $10,000 towards a new build. From last year, people were also permitted to withdraw the government's annual $521.43 contribution.
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Whangarei LJ Hooker sales manager Paul Beazley said withdrawing contributions was a smart investment - but it wouldn't be smooth sailing for buyers looking for an eligible property.
To be eligible to withdraw KiwiSaver contributions, the purchased home must be bought for less than $400,000. Mr Beazley said the median in Whangarei had increased above that recently.
"Property that would fit the criteria for first home buyers using KiwiSaver is pretty limited in number as well,' Mr Beazley said.
"And we've got the least amount of stock in Whangarei in the last seven or eight years," Mr Beazley said.
He said prospective buyers would have more luck looking, for example, for a two bedroom home rather than three.
He said withdrawing money from the savings scheme to put into a house was historically a safe investment.
"It's their money at the end of the day. It's going into a home, an investment ... you're getting some benefit out of owning a house rather than paying rent."
Mike Beazley from Whangarei Harcourts said the nearly 700 withdrawers would struggle to find suitable homes under the price cap.
"There are quite a few influences in the market at the moment affecting first home buyers. Probably the big one is stock levels," Mr Beazley said.
He said many investors had sold rental homes while the market was high. If bought by a first home buyer, or anyone who planned to live in the house, it meant there was now one less rental home available.
"[Low stock levels] is the biggest challenge here."
Ana-Marie Lockyer, general manager of wealth products at ANZ, said there had been a significant increase in withdrawals in the past two years nationwide.
"The reasons for that is awareness [of the withdrawal option] ... and people's savings reaching a level that it is helping them," Ms Lockyer said.
"In my eyes, we're really lucky in New Zealand to have first-home withdrawals as something in KiwiSaver because you can't retire without a home."
A Westpac spokesperson said the increase could be due to the growing number of people meeting the eligibility criteria of being a KiwiSaver member for at least three years.
Another default KiwiSaver fund, AMP managing director Blair Vernon said KiwiSaver had made it less of a challenge to break into the market.
"The reality is that it's always been challenging to save for a deposit, but because of KiwiSaver more New Zealanders already have a level of savings that might not otherwise exist, which they can now use to get into the property market.
"While withdrawing retirement savings might seem at odds with the outcomes of a scheme like KiwiSaver, most people we speak to regard home ownership as a key part of their overall retirement proposition."
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