PHOTO: FILE
🏠 Once Bitten, Forever Banned? How Relationship Breakups Are Freezing Kiwis Out of the Property Market
A growing number of New Zealanders—especially women leaving long-term relationships—are discovering a harsh reality: even with tens of thousands saved in KiwiSaver, they’re blocked from re-entering the property market.
💸 “I only used $3,000 back then… now I have $50,000, but I’m not allowed to touch it.”
That’s the situation facing Violet*, a solo mum in the Manawatū, who used a modest KiwiSaver withdrawal to buy her first home over a decade ago. Now, post-separation and raising children, she has enough saved for a deposit—but the rules say she’s ineligible.
🚪 Why Former Homeowners Are Shut Out of KiwiSaver Access
KiwiSaver rules currently state that you can only withdraw your funds once for a first home purchase. Violet’s $3,000 withdrawal many years ago disqualifies her from accessing the $50,000 she has built up since.
🗣️ “There’s no other option. I’ve asked. Even though I only used a tiny amount the first time, I’m locked out now.” – Violet
Even the “second chance buyer” criteria, designed for people who’ve been out of the market, does not apply to her—because she has used KiwiSaver for a home in the past.
👩⚖️ Financial Coaches: “This Disadvantages Separated Women”
💬 Financial coach Shula Newland says Violet’s story is far from unique.
She warns that KiwiSaver’s rigidity is harming separated women, who often spend any post-breakup payouts on rent, childcare, and daily living, leaving little room to save a fresh deposit.
🚫 The Catch-22:
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Used KiwiSaver once = disqualified forever
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No second home option unless you never used it before
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Criteria doesn’t reflect post-separation financial hardship
🧠 “This will take Violet many more years to save outside of KiwiSaver—if she can save at all. The rules need to change.” – Shula Newland
📉 Falling House Prices, Rising Desperation
Recent drops in property prices have not made it easier for separated individuals. Many don’t get enough equity back to reinvest after selling a home due to a relationship split.
And while some might assume KiwiSaver would be a safety net—it’s not.
👨💼 Ana-Marie Lockyer, CEO of Pie Funds, confirms the rules are “fairly strict”, requiring applicants to essentially have no assets and no prior withdrawals.
🔢 By the Numbers: KiwiSaver First Home Withdrawals
📊 In April 2025 alone:
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3,970 Kiwis withdrew KiwiSaver funds to buy a first home
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$167.3 million was released to help secure those purchases
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Yet none of it was accessible to people like Violet—just because they bought once before
🛠️ Time for Policy Reform?
Experts are calling on the Government to rethink KiwiSaver withdrawal rules—especially for those who have lost their homes due to separation.
✔️ A proposed solution?
Let KiwiSaver withdrawals be used again in the event of a proven separation or financial hardship, particularly when women and children are at risk of long-term rental dependency.
🔁 Until then, thousands may remain locked in a cycle of renting, despite having tens of thousands saved.
📌 Final Thought
KiwiSaver was designed to give Kiwis a foot on the property ladder—but for many, a breakup means losing that grip entirely. Without reform, Violet’s story could become the rule, not the exception.
SOURCE: RNZ