Government funds may be fuelling the increase in house prices, via the country’s KiwiSaver accounts.
BNZ’s head of research said New Zealanders using their KiwiSaver accounts to purchase a first home were a concern.
Stephen Toplis said those who withdrew the money to buy a property were using a significant Government-funded top up to fuel growth in house prices.
“We would recommend some urgent analysis on this development so that we might find out its extent, its impact on the housing market, its impact on household savings and the magnitude of the Government’s contribution.”
KiwiSavers become eligible to withdraw both their own contributions and their employer's contributions once they have been in the scheme for three years.
Thousands have already done so. Figures from the Financial Markets Authority last year showed that in the first nine months that withdrawals were possible, $12.3 million was used from the scheme for home purchases, with an average withdrawal of $9640.
Those who meet certain requirements are also eligible for a deposit subsidy, starting at $3000 per person and increasing to $4000 once they have been in KiwiSaver for four years, and $5000 after five years. This has mainly been taken up by people outside the main centres.