A homeowner in his mid-20s is urging Kiwis desperate to get onto the property ladder to join KiwiSaver - and have a plan.
Property prices have skyrocketed over the past year, boosted by low interest rates, removal of loan-to-value ratio (LVR) restrictions, investors wanting a higher return and existing homeowners trading up.
REINZ December data shows the national median sale price hit $749,000. For most first home buyers, buying at this price would mean stumping up almost $150,000 for a 20 percent deposit.
But having saved a similar amount to buy his first home two years' ago, young Kiwi homeowner Hamish says people can get there - they just need a plan.
"It's not just a matter of whether you're going to have a house or not, it's about when you're going to have a house," Hamish says.
After setting a goal and working out a plan with a mortgage broker, in less than six years Hamish saved a deposit of $125,000 - 33 percent of the $380,000 purchase price of his Palmerston North home.
Being able to use KiwiSaver was a huge help, he says. Leaving home at 18 and working full-time, he put 8 percent of his wages into a KiwiSaver growth fund. By the time he was 24, he was able to withdraw $60,000 - almost half of the deposit he put in - under the first home withdrawal.
"It's probably the easiest way to save it... after joining up KiwiSaver, it's gonna grow pretty fast," Hamish said.
He saved the rest of the money by sticking to a budget. After fixed expenses were paid, he withdrew $200 per week in cash to spend on food, petrol and entertainment, putting the rest into managed funds.
He bought a basic, reliable car. On payday, he imagined he had to save all the money and spend as little as possible to get by.
And he still managed to have fun.
"I went traveling overseas twice... it all just comes down to budgeting," Hamish said. "If you budget and plan for it, you can make it happen - it doesn't have to be a struggle."
Although individual circumstances are different, Hamish suggests people take a few minutes to compare KiwiSaver providers and make sure they're in the right fund.
Getting help from a mortgage broker could also pay off.
"I was just madly saving - having a mortgage broker helping me make a plan was a really good start," Hamish said.
"You can figure out what price-range you're working with - they might also tell you you're closer than you think."
REINZ chief executive Bindi Norwell said the lack of affordable housing in New Zealand is an increasing issue. Last month, the national median sale price was $121,000 (19.3 percent) higher than in December 2019. House prices are increasing at a faster rate than savings.
As the amount required for a deposit depends on the purchase price, Norwell suggests first home buyers look further afield and consider what's absolutely essential.
"Ultimately, it's important first home buyers know this won't be their 'forever' home.
"It's highly likely within a few years' time they will have started paying off the equity in their property and will be starting to think about their second home," Norwell adds.
More information about KiwiSaver can be found here.
Under current KiwiSaver withdrawal rules, members of at least three years can withdraw most of their savings for a home they plan to live in.