27 Aug 2010

Uptake low for Kiwisaver home deposit help

9:58 am on 27 August 2010

The high cost of housing is being blamed for a slow start to the Kiwisaver Home Deposit scheme.

Since 1 July, Kiwisaver members have been able to apply to withdraw their savings to help buy their first home.

They are also eligible for a deposit subsidy of $1000 for each year of membership.

So far 120 people have applied, with 10 approvals to withdraw savings and 44 approvals for the deposit subsidy; another 23 approvals are pending.

Housing Minister Phil Heatley says the numbers are expected to grow to about 1000 a year.

But Labour Party finance spokesperson David Cunliffe says the numbers are tiny and a key factor is the high price of housing.

Housing consultant Brian Dalley says apartments are often the only affordable option for many first-home buyers, particularly in Auckland and Wellington.

But he says banks demand deposits on apartments of up to 40%, which deters borrowers.