Close to 7000 applications from first-home buyers have been made for new housing subsidies worth up to $20,000.
Housing and Building Minister Nick Smith said the number of people accessing Government support for a deposit on a house had doubled since new larger HomeStart subsidies were introduced on April 1.
The scheme was expanded to give singles or couples on modest incomes grants of between $3000 and $20,000, depending on how long they have contributed to KiwiSaver and whether the house is a new build.
"KiwiSaver HomeStart is off to a strong start with 6788 applications in the first quarter to June, of which 2011 have been approved, 1740 pre-approved and another 2016 are in the process. We have paid out $7.2 million in grants to assist 2011 people into 1195 homes," Dr Smith said.
The popularity of the scheme had forced Housing NZ to take on more staff to deal with applications, Dr Smith said, and bring processing times back within the targeted 10 working days.
The HomeStart scheme would ensure people could get into their first home, particularly when taken with the Reserve Bank's decision to tighten LVR rules for investors in Auckland - changes that will come into effect from November 1, Dr Smith said.
However, Labour leader Andrew Little said the scheme would bring little comfort to those in Auckland, where house prices at the lower end of the market had eclipsed the subsidies over the same period.
"Even with that help, many people - young couples and others - are still finding that home ownership in Auckland is way out of reach.
"An extra subsidy like this, the international evidence is it doesn't help housing affordability. In fact, sometimes it can put upward pressure on prices and put them further out of reach.
"The real answer to housing affordability is building more houses. And that's what we need to do."
KiwiSaver HomeStart grant report