The loss of the First Home Grant might have been disappointing for some potential first-home buyers, but there are lots of tools still available to help you get into the property market.

As of May 22, 2024, first-home buyers no longer have access to the grant.

The scheme – providing up to $5000 for existing homes and $10,000 for new builds, was coming to an end, the Government said, so the money could be put to other uses, such as social housing.

Here are some key things to know to help you get closer to your first house, anyway.

KiwiSaver

The power of your KiwiSaver plan will probably deliver many times more for you than the First Home Grant could have. Even if you are just starting out in KiwiSaver, if you save for three years putting aside 3 percent of your income plus a 3 percent employer contribution and the member tax credit, you’ll have $12,000, in a balanced fund, according to Sorted.

KiwiSaver remains a very important tool for many first-home buyers. In June of 2024 alone, there was $129.4 million[AM1]  withdrawn from the scheme for first-home purchases, up from $99.8m a year earlier.

To qualify to withdraw funds for KiwiSaver, people need to be buying their first home, or, if they have previously owned property, but do not own property currently, be in the same financial position as a first-home buyer.

They need to have been in the scheme for at least three years and can withdraw their contributions, their employer’s contributions, the government contributions and any returns on the investment.

$1000 needs to be left in their KiwiSaver account after the withdrawal and any funds transferred from Australian superannuation savings cannot be withdrawn.

KiwiSaver can deliver a significant savings boost, even over a relatively short amount of time.

Sorted’s calculator indicates that a 20-year-old starting out in KiwiSaver, earning $70,000 a year and contributing 3 percent of their income plus 3 percent from an employer would have $22,636 saved after five years in a balanced fund.

Boost your savings

But you don’t need to settle for that.  There are ways that you can increase your KiwiSaver outcomes, which an investment adviser or KiwiSaver adviser will be able to talk you through..

One option that’s often suggested is increasing your contributions – if that same 20-year-old saved 10 percent of their income, they could have $51,230 saved after five years.  If they held off until they were 30 to buy a home, saving 10 percent, they could have $122,540 in a balanced fund.

You might also talk to an adviser or your provider about changing your fund type – being in a growth fund would add a couple of thousand to the five-year tally and six thousand to the 10-year saving plan, Sorted indicates, without any extra contributions being required.

As you come closer to withdrawing your money, you may need to move to a lower-risk fund. Riskier funds can move around a bit more with market volatility. Some people choose to put their money into a cash fund when they begin the house-buying process so that they know how much they’ll have available for a deposit[AM2] . This is a great time to seek advice from an investment adviser so that you have certainty about the steps ahead of you.

First Home Loan

The First Home Loan scheme remains available, for single people earning up to $90,000 a year and couples, and those with dependents, earning up to $150,000. It allows you to apply for a home loan with a 5 percent deposit. Your SHARE adviser can help you to determine whether this could be a useful solution for you.

Like some help?

SHARE advisers are experts when it comes to home loans. We can help you assess your current situation and work out an appropriate strategy to get in the door of your first home.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.