More than 1300 Bay residents have cashed in their KiwiSaver either to get on the property ladder or to clear debt.
Inland Revenue figures show 814 people had made a first home withdrawal after being in the scheme for three years while 509 had funds released for financial hardship.
Senior media adviser Pete van Schaardenburg said KiwiSaver members would be able to withdraw all or part of their savings early if they were suffering financial hardship or serious illness.
Tauranga Budget Advisory Service manager Diane Bruin said it had assisted 150 clients in the past 12 months, up 33 per cent from the year before however "it is not easy to get KiwiSaver hardship applications approved as debts usually need to be at the collection agency".
Most wanted to repay credit card or hire purchase debt although it had seen more sickness applicants and households that faced reduced income, she said. Working families were also seeking short term assistance.
"Often they will continue to pay into KiwiSaver but it may be the one thing that stops them going to insolvency."
On the flipside, local property developers and real estate agents were expecting a boost when the Government increased its support for first-home buyers on April 1.
Changes included the increased $450,000 house price cap for Tauranga with monetary contributions doubling for those who built a new home while the KiwiSaver First Home Deposit subsidy would be replaced with KiwiSaver HomeStart Grant.
Housing New Zealand administered applications and had approved 564 Tauranga HomeStart Grants worth $2.145 million and 135 in the Western Bay totalling $580,000, since July 2010.
Classic Builders co-director Matthew Lagerberg believed housing supplies would increase to meet new demand but short term the ability to build would be heavily influenced on the availability of land.
Golden Sands sales and marketing manager Mark Day said there had been an increase in people doing investigations prior to jumping into the market.
Blue Haven Management chief executive Bill Miller said buyers still had to be realistic even at the increased rate of $450,000.
"They are not going to get all the bells and whistles ... a lot of people have got an expectation of what they are going to get which doesn't match the dollar reality."
Trident Homes Tauranga franchisee Wayne Minnell said while $450,000 was a leg up, Tauranga was still an expensive place to live.
"It's all about affordability but we have had people come in with unrealistic budgets. You'll get a nice three bedroom house for that."
Ross Stanway, of Eves and Bayleys Real Estate, said low interest rates, competition between banks and KiwiSaver meant "that is pretty good for people looking to buy property".
ASB head of wealth products Roger Clayton said there may be a spike of KiwiSaver first home buyer withdrawals as members would have access to their entire account except for the $1000 government kickstart contribution from April 1.
Kiwibank spokesman Bruce Thompson said the scheme would encourage more people into their first home and competition between banks would remain steady.
ANZ's Sarah Berry said it expected customers who could use their KiwiSaver contributions to go towards their house deposit to increase.
Kate Hickman and Todd Bennett, with daughter Amelia, 17 months, want to build a new house and are waiting to see if they will qualify for the new KiwiSaver incentives on April 1.
Couple hope to build on dream
Tauranga couple Kate Hickman and Todd Bennett are waiting to find out if they will qualify for new KiwiSaver incentives on April 1.
They hope to build their dream home at Gate Pa and had bought the section, in a turn-key package valued at about $430,000 Ms Hickman said.
"We had our goal to have a house built before we are 25. Todd wants his media room and I want my kitchen, everything else we can compromise on but we have got our non-negotiables."
The 21-year-old said two years ago they bought their first home in Bellevue but had not been in the scheme long enough to withdraw their KiwiSaver. However, now they were being reassessed, after they sold the house in September.
The duo completely renovated the 1970s three-bedroom, "doer-upper" which had mosaic wallpaper and pink carpet.
"I was heavily pregnant at the time with our first child Amelia so stripping wallpaper was not my idea of fun," Ms Hickman said.
But that hard graft meant if they withdrew all of their KiwiSaver funds and received the HomeStart grant they would have a combined deposit of just over 20 per cent.
Changes to KiwiSaver on April 1
* House caps for grants and Welcome Home Loans will increase from $350,000 to $450,000 in Tauranga
* KiwiSaver First Home Deposit Subsidy, in KiwiSaver for 3 years 3000 per person, 4 years $4000, 5 years $5000
