Surge in KiwiSaver withdrawals for first home-buyers

Banks say many more first-home buyers have passed threshold to use scheme to get them into a property.

 

Mortgage lenders have noticed an upswing in the number of people withdrawing money from KiwiSaver for a first home.

John Body, ANZ Wealth managing director, said 1248 of the bank’s customers used money from the national scheme for a house withdrawal in 2012. At the end of last year, another 3890 had withdrawn funds.

KiwiSaver was seven years old so more people were passing the three-year threshold, after which they could apply to withdraw most of their savings.

“Many more people are actively planning to do this over the next year,” he said, citing an ANZ survey of 850 KiwiSaver members who intend to buy their first home in the next decade.

That survey found 89 per cent of respondents planned to make a first-home withdrawal from their KiwiSaver fund and 60 per cent intended to do so in the next five years.

It also showed most people include buying a family home as part of their retirement planning.

An ASB spokeswoman said by the end of January, the bank had processed 8293 first-home withdrawals for the ASB KiwiSaver Scheme.

“To put that in context, total ASB KiwiSaver Scheme membership on January 31 was 449,668,” she said.

A BNZ spokeswoman said staff had also noticed a rise in inquiries.

Although unable to provide figures last night, a spokeswoman for Westpac said: “The volumes of first-home withdrawals from the Westpac KiwiSaver Scheme are certainly increasing and we expect this to continue.”

Kiwibank was unable to provide figures last night.

House-hunters can withdraw part or all of their KiwiSaver contributions for a first home, as well as employer contributions, if they have been a member for at least three years.

Buyers must intend to live in the property.

If you’ve owned a home before, you may be able to make a withdrawal if you have earned income of $80,000 or less in the last 12 months.

“People seem to be a lot more educated in their entitlements now and, with so many having joined the scheme, there are more and more ticking over the three-year term to become eligible,” mortgage broker Bruce Patten of LoanMarket said.

Colleen Milne, chief executive of the Real Estate Institute, said agencies reported that it was still a difficult market in Auckland for first-home buyers “due to the high median price and we welcome the changes to the First Home Ownership Scheme due on April 1 which will assist”.

 

Media Contact:

Anne Gibson Property editor of the NZ Herald