Hardship Withdrawals in KiwiSaver: When Rules Are Being Bent

Topic #1:  Good  Returns 3rd of November- Market recovery signals consistent with interest rate falls

Topic #2: NZ Financial Adviser 5th of November - Auckland housing market steadies as listings rise and confidence grows

Topic #3: RNZ 6th of November- 'People learning to manipulate the system': Call for KiwiSaver hardship withdrawal changes

Topic #4: Oneroof 4th of November - SBS quietly offers ‘crazy’ home loan rates of 3.99% - lowest in four years

Topic #5: Realestate.co.nz 6th of November - Kiwis paying more at the supermarket, but less on rent

#KiwiSaver #HardshipWithdrawal #KiwiSaverNews #RetirementFunds #FinancialPlanning #MoneyMatters #FinancialLiteracy #FinancePodcast #MoneyTalks #WealthTips #SmartMoneyMoves #NZFinance #FinanceDebate #FinancialAwareness #InvestingInNZ #KiwiSaverReform #PersonalFinance

Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice. Join us today for the week in review where I talk about current events for the everyday investor and home buyer. Our topics for this week, first up from  📍 Good Returns on the 3rd of November, market recovery signals consistent with interest rate falls.

Topic number two from  📍 New Zealand Financial adviser on the 5th of November. Auckland housing market steadies as listings rise and confidence grows. Topic number three,  📍 from RNZ On the 6th of November, people learning to manipulate the system: call for KiwiSaver hardship withdrawal changes.  📍 Fourth topic from Oneroof on the 4th of November.

SBS quietly offers crazy home loan rates of 3.99% lowest in four years. And topic number  📍 five, from www.realestate.co.nz on the 6th of November. Kiwi's paying more at the supermarket, but less on rent. 

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So first up for this week, in review from Good Returns on the 3rd of November, market recovery signals are consistent with interest rate falls.

The early stages of a property market recovery may have emerged in the last two months. According to Cotality chief Property Economist Kelvin Davidson. Figures from Cotality's home Value Index show that the national median values now $811,662. Davidson noted that the second consecutive month of modest value increases is consistent with the falls in mortgage rates seen over the past year.

While prices in Auckland dipped by 0.2% last month, and Hamilton was flat, other main centers saw lifts including Tauranga and Wellington, both up 0.2% with Christchurch rising 0.4%, and Dunedin rising by 0.7%. Davidson cautioned that while the second lift could signal the early stages of recovery, the gains are small and overall economic and labor market sentiment remains cautious.

He pointed to the recent easing of LVR rules, the loan to value rule set for December 1st as a notable shift that may benefit investors slightly more than owner occupiers. Though it could also support first home buyers with pre-approvals for low equity loans. My thoughts on that are that it's more likely to be the first home buyers that are gonna really see the benefit of that.

'cause lots of home buyers are already getting lending at up to 90% and this just increases, the number of those low deposit lending that will be able to get done for those first home buyers. Davidson expects banks to act early on those rule changes with effects possibly showing through in the upcoming mortgage lending

statistics Regarding Labor's proposed capital gains tax, Davidson noted that while CGT policies overseas have not stopped house price growth, the proposal adds to the general sense that future property returns may be slightly lower. Auckland Submarkets were patchy with areas like Franklin and North Shore rising slightly, but larger markets like Manukau and Auckland City seeing drops.

Over the past 12 months, the Super City has seen a 2% decline, reflecting weakness in the largest sub-markets. Falls from the previous peak, still range from about 20% to 25% across the region. Wellington also saw mixed results with a 0.5% increase in Wellington City. Offsetting drops in areas like Lower Hutt.

Davidson stated that the falls from the market peak remain significant across the Wellington region, ranging from 23% to 26%. In a separate survey by independent economists, Tony Alexander and Crockers, there was a definite retreat. Among investors from wanting to buy existing properties with the figure dropping from 76% in September to 62% in October.

This shift suggests that investors are increasingly looking at new builds or developing their own properties, which Alexander believes could be an early sign of residential construction rising in response to falling interest rate. From what we are seeing at Property Apprentice, we are certainly seeing a shift away from buying new builds.

People are more focused on looking for cash flow now, especially with the potential that rule changes could come in if we get a change of government next year following the election. So yeah, I think more and more of the seasoned investors, experienced investors and new investors who understand the fundamentals of investing.

They're focused more on cash flow than long-term capital growth.

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 Topic number two from New Zealand Financial Adviser on the 5th of November, Auckland housing market studies as listings rise and confidence grows. Auckland housing market demonstrated signs of stability in October with prices and sales activity holding within narrow ranges.

Barefoot and Thompson reported that the city's median selling price rose put 2.2% for the month settling at $950,000. The managing director Peter Thompson, clarified that this increased signals price stabilization around that mark rather than market acceleration, noting that buyers remain cautious.

Cotality New Zealand data presented a similar picture showing Auckland values dipping slightly by 0.2% in October. Thompson asserted that the market has likely reached a solid price base from which it can face the summer trading season with growing confidence, although it is still waiting for a recovering economy to provide the final push.

The average sale price in October was $1,079,030, marking the third consecutive month of price stability. Sales volumes reached 930 transactions. That's a 9.9% drop from September, but Thompson still described it as a solid month's trading. The median price was heavily influenced by the lower price segment with a quarter of all sales falling into the under $750,000 category.

This category, strong pull underlines the growing influence of lower cost townhouses and apartments on the nature of Auckland's housing stock. New listings surged in October with 2,167 new properties coming to market. That's a 21.7% increase from September. This pushed the total stock available to 6,024 properties on the company's books, the highest level in three months.

In contrast to the residential market, the rural and lifestyle sectors remain subdued recording their lowest monthly turnover of the year at $38 million. 

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Topic number three from RNZ on the 6th of November, people learning to manipulate the system: there's a call for KiwiSaver hardship withdrawal changes.

KiwiSaver providers are raising concerns that many hardship withdrawals are being made for inappropriate reasons, leading to calls for significant policy changes. Data from Inland Revenue shows that almost $49 million was withdrawn for hardship in September. That's up sharply from $36 million a year earlier.

Withdrawals are intended for urgent needs, such as meeting basic living expenses or paying for medical treatment. KiwiSaver providers reported anecdotal evidence of misuse including one application being approved because a client could not sell a luxury vehicle quickly enough, and another person allegedly using the funds for cosmetic procedures.

The consensus among providers such as Koura founder Rupert Carlyon

 is that people are a hundred percent withdrawing money for the wrong reasons, sometimes even deliberately incurring debt to qualify for a withdrawal. Carlyon questioned whether the hardship provision is appropriate at all, particularly since financial incentives exist to join the scheme which some people are learning to manipulate. Financial mentors are also concerned.

David Verry from North Harbour Budgeting Services said that hardship withdrawals are a client's number one request, but only a 13 week bandaid that fails to address fundamental issues like low income or high debt. Verry noted that clients often disengage once the funds are approved, and mentors rarely know if the money goes to the requested creditors.

There is significant support within the industry for paying withdrawal funds directly to creditors rather than giving the cash to the applicant. PI fund's chief Executive Ana- Marie Lockyer supported looking into direct payments, emphasizing the need to keep the process simple and fair while balancing administrative practicality and member dignity.

However, Koura and ANZ acknowledged the administrative   difficulty of such a change, given that applicants often have multiple debts. Public trust, a supervisor warned that introducing direct payments could add cost and complexity for providers, which would slow down support for those genuinely in.

Regarding support for those advising applicants financial mentors are severely underfunded. FinCap, which runs the national call center, is pushing for broad industry contributions and increased government funding to establish a stable workforce of expert financial mentors. The Commerce and Consumer Affairs Minister Scott Simpson acknowledged the increase in applications, but stated that the government is not considering a levy to support mentors or requiring direct payments to creditors.

He urged that all other options be considered before KiwiSaver Funds are drawn. And I agree with that, uh, because I think that, you know, at the end of the day, if you're doing an early withdrawal from KiwiSaver, you are literally taking money from your future self. So if you don't, absolutely have to, it's far better off to leave it invested until you need it for retirement.

  📍  📍 If you'd like to learn more about investing in property, join me at one of our free events called How to Succeed With Property Investing. I'll discuss strategies for successful investing from my perspective as an experienced investor and a financial adviser, and all of our free events are available live and online.

Check out www.propertyappprentice.co.nz for upcoming dates and register today. We don't sell property, so it's all about increasing your knowledge to reduce your risk.  If   📍  📍 you've already been to one of our free events and you'd like to find out more about how we can help you to reach your financial goals, you can also book a no obligation phone call or meeting with my husband Paul Roberts, via the website.

 Fourth topic for this Week in Review from Oneroof on the 4th of November. SBS quietly offers crazy home loan rates of 3.99% the lowest in four years, one of New Zealand's smallest, smallest banks, SBS Bank has quietly dropped. Its one in two year home loan rates to 3.99%. That's the lowest non advertised rate offered by any bank in four years.

This special rate is available to borrowers with at least 20% equity and includes a 1% cash back of up to $20,000. This move follows TSB Bank's recent rate cut and is expected to trigger a fresh round of rate reductions across the market, although perhaps not as steep as sbss offer. At the time of publication, the five largest banks were offering a one year rate of 4.49%.

Mortgage adviser Gareth Veale viewed the 3.99% rate favorably, especially given the cashback offer. He suggested that the one year term is currently the best option. Cautioning that fixing for two years risks locking in higher for longer than needed due to the difficulty in predicting market changes beyond a year.

Another adviser, Nathan Miglani noted that SBS Bank has historically offered sharp rates to attract customers, and anticipated that the majority of banks would follow suit within the next few months. Miglani has also observed a shift in client behavior with more borrowers opting to fix for longer terms, moving from six months to a year, or from one year to two years, often hedging their bets by splitting the loan.

He recommended that for those seeking certainty or whose lending is under $350,000, fixing shorter is still the best option. Miglani predicted that interest rates will bottom out around March or April, stabilizing in the high three percents or early four percents for the next few years. Leading economics commentator, Tony Alexander also weighed in suggesting that current mortgage rates are at or near their trough point.

He noted that the longer term rates reflect expectations over the next five years, not just the next month. Alexander previously advised taking a five year mortgage rate below 5% for borrowers who wanted to sit and forget. And he believes that spreading the risk by splitting a mortgage between a shorter and longer term is probably a good idea most of the time due to increasing global uncertainty.

My thoughts on this are the longer term rates are more affected by wholesale interest rates or swap rates. And what we've noticed over the last week is that swap rates have started to increase a little bit. So we could be at the early stage of the end of the long-term interest rates, reduction, it's reducing.

So yeah, I think splitting your mortgage with some on shorter term rates and some locking in those cheap rates when they're still available for the four or five year rates. But that seems to be a good option to me. Spread your risk because nobody's got a crystal ball that works when it comes to interest rates.

Anything can happen and the interest rate environment can change very, very rapidly. Talk to your mortgage adviser if you want help on your individual financial position for fixing interest rates.

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 Topic number five, from www.realestate.co.nz on the 6th of November. Kiwis are paying more at the supermarket, but less on rent.

 The national rental market is shifting in favor of tenants marked by a decline in average rents despite increasing cost of living pressures. According to the latest data from realestate.co nz, the National average Weekly rental prices down 3.2%, year on year to $628. Www.realestate.co.nz Spokesperson Vanessa Williams said that this decline provides a rare spot of relief for tenants, but it signals tighter conditions for landlords.

She noted that new rental listings were up 11.4% nationally in October, 2025, compared to the previous year with total stock also rising by 21.2%. William stated that the high supply gives tenants more choice and more negotiating power. The market displayed significant regional shifts. Waikato hit a record high for new rental listings, which were up 16.1% year on year, driven by areas like South Waikato, Waikato, and Hamilton,

hamilton City. The average rental price in the region fell slightly by 1.7%, down to $566 a week. In Auckland, the average rental price fell by 3.4% to an average of $683 a week. Most districts saw declines with Y Hei recording a sizable 20.8% drop. Wellington saw prices fall across the board with the biggest year on year decreases in Upper Hutt, which saw a drop of 11.5%, Wellington City,

at 10.9% and Lower Heart Act 8.9%. New listings surge dramatically across Wellington with 101.8% increase in Lower Hutt. Williams explained that this surge in supply is a classic case of supply and demand, which is increasing competition among landlords and contributing to downward pressure on prices.

Canterbury was the only region that saw a nominal annual price change up just $1 to $586 a week, despite new listings rising by 10%. Pockets of price growth were seen in districts like Hurunui up 25.7% and Banks Peninsula up 16.3%. Williams emphasized that strong regional variation makes it particularly important for landlords to understand what is driving local demand as setting the right price requires looking closely at local conditions and tenant expectations, not just national trends.

For clients of ours at Property Apprentice, we're really looking forward to having Vanessa Williams come and speak to us for the network meeting next week, next Thursday evening. So keep an eye on your inbox to get the invitation to join that live online event. Now as a pivotal moment in the New Zealand property market and you need a strategy designed for those exact conditions.

  📍  📍 Join our free event called How to Succeed With Property Investing. These events are all available online so you can gain valuable insights and strategies tailored to today's market conditions regardless of where you live, whether you're an experienced investor or just getting started. This free session's designed to equip you with the key tools and insights to make

confident informed decisions. So don't miss out register today and take the next step towards achieving your financial success. I'll also tell you more about how we can help you as a client to achieve your investing goals. So if you're interested in finding out more about how we can help you, go to www.propertyapprentice.co.nz and register for one of those free events today.

  📍  📍 Or book a no obligation free meeting with my husband Paul to through the website as well. That's property apprentice.co nz and he can answer any questions that you've got about how we can help you on your journey.  Thanks for listening.  

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