Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

KiwiSaver should be allowed for investment properties


Derryn Mayne

The Government needs to broaden KiwiSaver’s withdrawal criteria to allow more New Zealanders to access the scheme to buy an investment property, says one real estate boss.

KiwiSaver has more than three million members with average balances of around $20,000, with many accounts experiencing volatility in value since the Covid-19 health and economic crises. Inland Revenue figures revealed today also show in April and May more Kiwis tapped into their retirement savings by making hardship withdrawals.

Last year the Retirement Commissioner suggested that KiwiSaver members should be allowed to withdraw money from their accounts to buy rental properties, not just first homes. Owner of Century 21 New Zealand, Derryn Mayne, now believes the concept needs to be urgently revisited by the Government.

“Given these unprecedented times and the growing opportunities out there, the rules now need to be broadened.

“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,” she says.

Ms Mayne says the strict owner-occupier criteria was fine during the Global Financial Crisis over a decade ago, as there were far less people in the scheme and the average balances were less than $3,000, given KiwiSaver was launched in 2007.

“The Government needs to think of new ways to encourage property purchases. We are not short of buyers for now, but as a country we need to think laterally if we’re to keep our housing market ticking along.”

The Century 21 New Zealand real estate boss says it’s wrong people can only access KiwiSaver as an owner-occupier property purchaser, when the reality is a lot of people simply can’t afford to buy where they want to live.

“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 a buyers’ market.”

As KiwiSaver funds cannot be used for an investment property, those using the scheme must live in the home for at least six months.

Ms Mayne says any fear of investment properties, using KiwiSaver, being quickly flipped could be easily rectified. A rule could ensure people accessing their funds have to hold onto to their investment property for certain amount of time.

She says enabling Kiwis to use the scheme to help buy an investment property is a safe bet for them and positive for the country. It would boost home ownership which has declined over the past 30 years from about 78% in the 1980s to about 55% now.

“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,” says Derryn Mayne.

www.century21.co.nz


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Paymark: Lockdown Equals Slowdown For Some

The three days of lockdown for Auckland earlier this month made a clear impression on our retail spending figures. While only Auckland moved into Level 3 lockdown, the impact was felt across the country, albeit at different levels. Looking at the ... More>>

Infrastructure Commission: Te Waihanga Releases Report On Water Infrastructure

The New Zealand Infrastructure Commission, Te Waihanga’s latest discussion document highlights the importance of current reforms in the water sector. Its State of Play discussion document about water infrastructure is one of a series looking at the ... More>>

Sci-Tech: Perseverance Rover Lands On Mars – Expert Reaction

NASA has landed a car-sized rover on the red planet to search for signs of past life. The vehicle has more instruments than the four rovers preceding it, and it’s also carrying gear that could help pave the way for human exploration of Mars. The ... More>>

ALSO:


ASB: Quarterly Economic Forecast Predicts OCR Hike As Early As August 2022

Predictions of interest rate rises have been brought forward 12 months in ASB’s latest Quarterly Economic Forecast. Chief Economist Nick Tuffley now expects the RBNZ to begin raising the OCR from its current level of 0.25% as early as August ... More>>

ACT: Matariki Almost A Half Billion Dollar Tax On Business

“Official advice to the Government says an extra public holiday at Matariki could cost almost $450 million,” ACT Leader David Seymour can reveal. “This is a perfect example of the Prime Minister doing what’s popular versus what’s responsible. ... More>>

Genesis: Assessing 6,000 GWh Of Renewable Generation Options For Development By 2025

Genesis is assessing 6,000 GWh of renewable generation options for development after starting a closed RFP process with 11 partners. Those invited to participate offer a range of technologies as Genesis continues to execute its Future-gen strategy to ... More>>

OECD: Unemployment Rate Stable At 6.9% In December 2020, 1.7 Percentage Points Higher Than In February 2020

The OECD area unemployment rate was stable at 6.9% in December 2020, remaining 1.7 percentage points above the level observed in February 2020, before the COVID-19 pandemic hit the labour market. [1] In December, the unemployment rate was also stable ... More>>

Stats NZ: Unemployment Drops To 4.9 Percent As Employment Picks Up

The seasonally adjusted unemployment rate dropped to 4.9 percent in the December 2020 quarter, from 5.3 percent in the September 2020 quarter, Stats NZ said today. Last quarter’s unemployment rate of 5.3 percent followed the largest increase observed ... More>>