Thursday 11th July 2019
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First home buyers continue to grow as a proportion of the total home mortgage market, with KiwiSaver fund withdrawals now accounting for about half the deposits used to secure a first home, according to KPMG.
Two years ago, first home buyers made up just 11.9 percent of new mortgage lending, but that had increased steadily to hit 17.2 percent in the March quarter, while property investors continue to fall away as mortgage borrowers, the firm says in its latest quarterly review of the banking market.
Investors made up 18.5 percent of all new lending in the March quarter, down from between 21 per cent and 25 percent for much of last year.
KPMG says KiwiSaver withdrawals for first home purchases - as a percentage of new mortgage lending to that group - rose to 9.37 percent on a seasonally-adjusted basis, up from 8.78 percent in the December quarter. That indicates that "more of first home buyers' deposits were coming from their KiwiSaver funds," KPMG said.
Assuming first home buyers need a 20 percent capital deposit before being able to borrow for a home, some 37 percent of first home buyers' deposits "are coming from KiwiSaver".
"Given that many first home buyers will have deposits lower than 20 percent of their house price, it is probably closer to 50 percent, or half, of a first home buyer's deposit coming from their KiwiSaver funds on average," KPMG said.
That raises questions about whether the use of funds intended for retirement for home purchases was "just pushing the problem of retirement affordability down the track for future generations."
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