The Government also offered a HomeStart grant to eligible house-hunters of up to $5000 to buy 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.
Whanganui real estate agents said it was good news young people were using the money they had saved in a housing investment.
Ian Barns from Bayleys Whanganui was pleased to see such a number.
"It's a great scheme, I totally support it, and I love the fact young people are using it to get into their first home."
Mr Barns said tougher lending restrictions on investors had also opened up the market for first-home buyers.
"We're not getting the amount of investors we used to get, that's for sure.
"We're definitely seeing a lot of young couples coming in and using KiwiSaver. And looking in lots of different suburbs too ... right across the board, which again I think is a very good thing."
Whanganui Property Brokers manager Philip Kubiak agreed.
He said young people were buying in different areas around the city - Castlecliff, Gonville, Whanganui East and Aramaho.
The average amount withdrawn in the last year was almost $17,500. With $35,000 between a couple - along with other savings - was almost enough for a deposit.
"A lot of first-home buyers can still get a help from Mum or Dad," Mr Kubiak said.
"It's a great opportunity to get on the property ladder, and to get their first home, build some equity, and only good things can happen from there.
"The numbers of properties on the market have dropped dramatically, but there's still a good selection."
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.
AMP managing director Blair Vernon said KiwiSaver had made it less of a challenge to buy a first home.
"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."
