Century 21 New Zealand owner Derryn Mayne is calling for the government to broaden its KiwiSaver withdrawal criteria to allow more Kiwis to access the scheme to buy investment properties.
The Retirement Commissioner advised the government last year to allow KiwiSaver members to withdraw money from their accounts to buy rental properties aside from first homes only – and Mayne now urges the government to consider the idea.
“Given these unprecedented times and the growing opportunities out there, the rules now need to be broadened,” Mayne said.
“You can withdraw funds for your first home or for land to build your home if you've been in KiwiSaver for at least three years. There are also circumstances in which people may access their funds if they've previously owned a home. However, there remains absolutely no opportunity to use the voluntary savings scheme to buy a property you're not going to live in.”
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Mayne pointed out that Kiwis cannot afford to buy where they want to live. Therefore, it is wrong that they can only access KiwiSaver as an owner-occupier property buyer.
“If you live in Auckland and can't afford to purchase there, you should be able to stay renting but use your KiwiSaver to buy an investment property in say Waikato. That's increasingly appealing given the lower deposit requirements, rock-bottom interest rates, and buyers' market,” she said.
She suggested that the government could establish a rule to ensure that people accessing their funds would hold onto their investment property for a certain amount of time.
“Residential property will always deliver a strong capital gain over the long term. What's more, such a simple policy tweak would give a shot in the arm to New Zealand's property market and help the overall economy,” Mayne concluded.