The number of first home buyers accessing government support for placing a deposit on a house has doubled since the new KiwiSaver HomeStart package took effect earlier this year.

'KiwiSaver HomeStart is off to a strong start,” says Building and Housing Minister Dr Nick Smith after the release of the first quarterly report this week.

People are turning to the new KiwiSaver HomeStart package to help them get into their first home. Photo: File.

'There were 6788 applications in the first quarter to June, of which 2011 have been approved, 1740 pre-approved and another 2016 are in the process.

'We have paid out $7.2 million in grants to assist 2011 people into 1195 homes.”

The HomeStart scheme came into effect on April 1, replacing the KiwiSaver First Home Deposit Subsidy.

It provides grants of up to $10,000 for the purchase of an existing home, and grants of up to $20,000 for the purchase of a newly-built home.

The $418 million scheme has been projected to help 90,000 people over the next five years.

'HomeStart is the most generous scheme to support first home buyers since the 1970s,” says Nick, 'where there were State Advances loans and families could capitalise the family benefit.

'It makes home ownership an achievable goal for tens of thousands of people on middle incomes, with the combination of KiwiSaver, HomeStart and the Welcome Home Loans.

'There have been difficulties for Housing New Zealand dealing with the rush of applications. That resulted in some applications being processed too slowly.

'The performance agreement with Housing New Zealand is for applications to be processed within 10 working days, but this stretched out to 20 days in May. Housing New Zealand is now meeting the 10-day target with the support of extra resources and staffing.”

The report also covers other home ownership assistance products including the Welcome Home Loan scheme, which was also revised on April 1 and resulted in a record 617 new approvals this quarter.

The two schemes that help enable the purchase of state houses, the Tenant Home Ownership scheme and the FirstHome scheme, have also assisted 434 families in owning their own home since they were introduced.

'I have not been able to include in this first quarterly report the information on how many and what funds have been withdrawn from KiwiSaver accounts for home ownership,” admits Nick.

'This data requires information from all KiwiSaver providers and will be included in subsequent reports.

'HomeStart is one part of a wider programme of work the government has underway to help more people into owning their own home. We are freeing up more land faster through our eight Housing Accords and 118 Special Housing Areas.

'We have initiatives in place to constrain building materials costs, rein in development contributions, cut compliance costs and invest in improved sector productivity.”