More than 50,000 KiwiSaver members withdrew a combined $2.2 billion to buy first homes in the year to March, according to the Financial Markets Authority's annual KiwiSaver report — as new figures show first home buyers now make up a record share of the property market.
According to Cotality, 29% of all house sales have gone to first home buyers, the highest proportion on record.
"That's a record share," said Cotality NZ head of research Nick Goodall.
Goodall said the share is even higher in some regions. "Auckland, it's around about 30%, so even higher than the national figure, and Wellington for example it's up at 37%. Parts of the broader Wellington area, up in the Hutt, is actually closer to 40% as well."
KiwiSaver first-home withdrawals have reached record levels, while first homebuyers becoming an increasingly active group in housing market. (Source: 1News)
He said fewer active buyers in the market, alongside large KiwiSaver balances and relaxed loan-to-value ratio rules, have made it easier for first home buyers to get a foot in the door.
"We know that half of all first home buyers getting into the market are doing so with less than that 20% deposit, so that's a big help as well," he said.
FMA head of investment management Emelie Jensert said KiwiSaver was designed with first-home withdrawals in mind as well as retirement saving.
"The balances are increasing, younger people who might be of house-buying age are increasingly having spent more time in the scheme as well, so that is something that we would naturally see," she said.
Among those who have used their KiwiSaver to purchase their first home this year were Auckland couple, Hinemoa and Stephen Reed - who have also recently welcomed their first child.
"It's fun to decorate and have plans for where I'm going to have everything," she told 1News.
Stephen thought buying a house was still a long way off, until the couple spoke to a mortgage broker, who said it was possible.
"I remember getting that phone call and just being like oh my gosh, we can do it," he said.
Also a real estate agent for Barfoot and Thompson, Stephen said that he'd been seeing more first home buyers in his line of work.
"There are a lot more younger families coming through, a lot more conversations around how do we use our KiwiSaver."
For those who have used their KiwiSaver towards their first deposit, Jensert enouraged them to take a step back.
"Once your account has decreased in size, have a look and make sure that you're still in the right fund, that you're contributing the amount that you would like to do, and then continue to engage with the scheme throughout its lifetime as well," she said.
House prices continue to fall
The latest QV House Price Index out this week show residential property values dropped by 1.9% nationally over the three months to the end of August –the largest quarterly decrease in two years.
The average house price now sitting at $894,977.
Meanwhile, ASB's latest housing outlook said the house price peaks of 2021 are unlikely to be reached again until late 2029.
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