The government also offered a HomeStart grant to eligible house-hunters of up to $5000 to purchase an existing home, or $10,000 towards a new build. From last year, people were also permitted to withdraw the government's annual $521.43 contribution.
Managing director of Hawke's Bay Harcourts Kaine Wilson said he was "extremely surprised" to hear almost 900 people had made a withdrawal.
The average amount withdrawn per person in the last year in Hawke's Bay was around $17,000. Between a couple, $35,000 - along with other savings - was almost enough for a deposit.
Mr Wilson said because young buyers often didn't have enough for a deposit, mums and dads were helping out.
"New buyers are getting into the market more than they have been in the past months, but they are being supported by equity advance of gifted money," Mr Wilson said.
"Because the market's moving so rapidly, it's not so much them pulling their [KiwiSaver] funds but it's them being supported by family with extra money towards it."
He said there has been a "very visible reduction" in investors, which made it easier for young buyers.
Simon Tremain from Tremain Real Estate said there was still competition with investors, however, and many buyers were desperate to get their hands on a home.
"There's still a lot of competition around those lower end properties. There's competition with investors and other first home buyers. It's really just trying to get onto the property ladder really.
"A lot of first home buyers are concerned the longer they have to leave it to buy a house, the further away that house gets from them. I know with the market moving substantially in the last 18 months... first home buyers have been trying to get into the market.
He said the median price in Hawke's Bay was around $385,000 but a first home buyer or someone with less money could get a decent place for less than $300,000.
Ana-Marie Lockyer, general manager of wealth products at ANZ, said there had been a significant increase in withdrawals in the past two years nationwide.
"The reasons for that is awareness [of the withdrawal option] ... and people's savings reaching a level that it is helping them," Ms Lockyer said.
"In my eyes, we're really lucky in New Zealand to have first-home withdrawals as something in KiwiSaver because you can't retire without a home."
A Westpac spokesperson said the increase could be due to the growing number of people meeting the eligibility criteria of being a KiwiSaver member for at least three years.
Another default KiwiSaver fund, AMP managing director Blair Vernon said KiwiSaver had made it less of a challenge to break into the market.
"The reality is that it's always been challenging to save for a deposit, but because of KiwiSaver more New Zealanders already have a level of savings that might not otherwise exist, which they can now use to get into the property market.
"While withdrawing retirement savings might seem at odds with the outcomes of a scheme like KiwiSaver, most people we speak to regard home ownership as a key part of their overall retirement proposition."
Ten years of KiwiSaver
Hastings
Withdrawals 996
Total $15,328,447
Havelock North
Withdrawals 259
Total $4,333,405
Napier
Withdrawals 1,503
Total $23,408,589
Otane
Withdrawals 17
Total $270,400
Other
Withdrawals 76
Total $1,107,812
Te Awanga
Withdrawals 85
Total $1,140,153
Waipawa
Withdrawals 69
Total $955,055
Waipukurau
Withdrawals 136
Total $2,111,332
Wairoa
Withdrawals 127
Total $1,815,045
Source: IRD (figures from 1.07.2007 to 30.04.2017)
