Almost 11,000 new home-owners have cashed in their KiwiSaver accounts to use its first home buyers' provision to buy a house in the last year.
The number is a seven-fold increase since 2011, when the first KiwiSavers gained eligibility, with $120 million withdrawn from savings accounts, costing $15.7m in government subsidies. It is understood the Government is looking at the success of the scheme as a template for shielding lower income earners from proposed new bank lending restrictions.
A total of 10,733 New Zealanders used KiwiSaver funds for a deposit on their first home in the year to March - up from 5737 the previous year and 1274 in the year to March 2011.
About 76,000 homes were sold in New Zealand in the year to March, according to Real Estate Institute of New Zealand figures.
Housing Minister Nick Smith said the fact the scheme was building momentum was "great news". "We want New Zealand to be a country where owning your own home is an achievable aspiration and this is hugely encouraging."
The amount of savings withdrawn increased from $12.3m in 2011 to $57.2m in 2012.
Marking KiwiSaver's sixth birthday today, Smith said the 4488 subsidies totalling $15.7m last year was also an increase, from only 1071 and $2.8m in 2011.
The figures come amid major concern about lower income earners and first home buyers being priced out of the housing market by rampant prices.
As the Government and Reserve Bank look for solutions, government sources have agreed that using the KiwiSaver first home buyer criteria - which includes a house price and income cap - could be an option to protect first home buyers from proposed lending restrictions.
One of the measures being heavily pushed by the Reserve Bank and endorsed by the Government is limiting the number of high loan to value ratio mortgages - where people borrow too much compared with the value of the property.
The Government says it is concerned about the impact on first home buyers and wants to find a way to make sure they are not locked out of the market.
Prime Minister John Key and Reserve Bank governor Graeme Wheeler have sought agreement over the issue and Key believes they can find a solution that cools the market but does not seriously impact first home buyers.
He has suggested that they could be exempted from the restrictions though the Reserve Bank has stated they should be included in any "speed limits".
BNZ chief economist Tony Alexander, however, says that first home buyers are a "key driving force" behind the strengthening market. In Wellington first home buyers were 32 per cent of sales followed by Bay of Plenty on 27, Waikato on 25 and Auckland and Otago on 23.
Revenue Minister Todd McClay said 2.1 million New Zealanders joined KiwiSaver in the six years since it was launched, with 25,000 new enrollees last month alone.
KNOW THE RULES
After three years in KiwiSaver you can apply to withdraw money to go toward a deposit for your first home. You can withdraw some or all of the fund, except for a few tax credits and the $1000 government-paid kick-start money. The scheme is restricted to first home buyers, ruling out dabbling in investment property, but there are some exceptions if you have owned a home before.
- © Fairfax NZ News
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