The Government also offers a HomeStart grant to eligible house hunters of up to $5000 to buy 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.
Steve Lovegrove of Professionals McDowell Real Estate Rotorua said an increase in the number of withdrawals was expected and positive.
"There's a maturity in people's [KiwiSaver] savings. [They're at] a point where it's viable to do something," Mr Lovegrove said.
Mr Lovegrove said combined with the uncertainty, frustration and the lack of investment that renting offered, more people were looking to break out of the cycle.
"We have definitely seen an increase here in the numbers of first home buyers over the last 12 months.
"In Rotorua, achieving an entry level home on the basis of a KiwiSaver deposit is much more achievable [than other cities]."
He said last year's increase in the deposit required for investors to get a loan had removed some demand.
"Taking out these investors, first home buyers have a better chance."
Eves and Bayleys chief executive Simon Anderson said the increase in those using their contributions to buy was "a very positive trend".
He said he has noticed overwhelming demand from first home buyers this year.
Two seminars for first home buyers in Tauranga this year have both sold out, and a third, in Hamilton this week, had done the same.
"We are seeing a lot more first home buyers in the market. They're looking for innovative ways to fund, and KiwiSaver is one of them," he said.
He said young buyers were also asking for parental help, or teaming up with another couple to pull together enough money for a deposit.
The Mortgage Centre owner Graeme Leigh, based in Rotorua, said he was seeing more young couples taking advantage of their KiwiSaver funds to buy their first homes.
"The clients I am seeing taking this opportunity are almost exclusively younger couples and I don't have a problem with that because they still have a number of years to rebuild those funds. If it were someone at a later stage in their life, I'd be less excited because their chance to get those funds back up is less."
Mr Leigh said he always got a buzz from seeing young couples getting into their first homes.
"This is really their only opportunity to access those funds before they reach 65 so it is pleasing they are able to use it to make an investment in their own home.
"I don't think it is being abused, it is genuine, excited couples using KiwiSaver to become homeowners. Coupled with the Government's HomeStart grant, people are able to buy their first home without having to borrow as much."
Ana-Marie Lockyer, general manager of wealth products at ANZ, said there had been a significant increase in withdrawals in the last 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 down to the a growing number of people meeting the eligibility criteria of having been 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."
- Additional reporting by Stephanie Arthur-Worsop
Ten years of KiwiSaver
Rotorua
Withdrawals 1380
Total $21,804,165
Whakatane
Withdrawals 441
Total $6,867,602
Opotiki
Withdrawals 126
Total $1,925,871
Ohope
Withdrawals 71
Total $$1,040,901
Kawerau
Withdrawals 92
Total $1,397,522
Tauranga, Mt Maunganui, Papamoa
Withdrawals 3079
Total $48,780,799
Te Puke
Withdrawals 263
Total $3,930,445
Source: IRD (figures from 1.07.2007 to 30.04.2017)
