KiwiSaver helping people into their first homes

December 10, 2012 at 2:15 PM

The fact that both low and high income earners are withdrawing from their KiwiSavers to put towards a deposit for their first home, particularly in Auckland, is often the difference between getting into a home now, and not getting into a home.

Auckland Mortgage Broker Christine Lockie told National Radio that the increase of people using their KiwiSavers to help fund the purchase of their first home is evidence of the Auckland market heating up.

"Interestingly many people tell me they are less than impressed by the returns they get from KiwiSaver and they believe that buying a house will give them a better return in the long run."

National Radio reported that more than 5000 people applied to use their KiwiSaver money as a deposit since 2007, with more than a thousand applying in the first three months of this year.

Listen to Christine Lockie on National Radio: 



Posted by Warley on
Eden Recently I stumbled arcoss my dream property in Christchurch and up to now hadn't even thought of buying property in the short term. But this place is special and has history that wasn't lost in the earthquakes. So I thought I'd jump in and purchase my first home. Because of the risks associated with post earthquake Christchurch understandably my bank want a 25% deposit which is larger than I could pull together at short notice without calling on my kiwisaver as a first home buyer.I had made voluntary payments to my Kiwisaver so had a very decent amount which with other savings would have bought me very close to the deposit needed. Unfortunately, I learnt I still have 6 months before I have been with the scheme for the 3 year withdrawal period. Now I understand this is what the kiwisaver legislation requires but when I enquired about having the funds released on the 3yr maturity date to go towards the mortgage (assuming I could pull a deposit together without the kiwisaver component), I was told (by my fund manager) if I were to purchase a property before the 3yr date I couldn't access these funds because the statutory declaration for the funds to be released must be signed before a a property is purchased .Now, I don't understand why this needs to be the case. So the funds could not be used for the deposit at this minute, they could still go towards the mortgage on my first home at the later date. And, It may ease my banks mind knowing the money will be available at the later date.Unfortunately, what it does do is leave me no choice but to wait until Nov when the 3yr period passes before I buy my first home or give up the right to access those funds towards my first home should I choose to buy before the 3yr period.Of course the government doesn't want to make Kiwisaver easy to leave which I'm all for, but if you're going to have a facility to help first home buyers then the rules should be a little more flexible in regards to using kiwisaver funds towards first home deposits and/or mortgage. In my case I'm resolved to the fact I have to wait until Nov, and unfortunately miss out on my dream home, for now.
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