MadEngineer:

 

^ that depends on how the value of property rises vs kiwisaver.  i can't help wonder if money spent to offset a mortgage to buy a house earlier would be more beneficial than compounding interest.  who knows, world population is peaking so what that will do to housing demand. no signs of that yet here in nz though. worked for us - we just sold a house (rental) for three times the amount we purchased it for 14 years later.

 

chicken or egg?

simple problem is sellers increase price when they see people have money. eg low interest rates = higher house prices, subsidies = product price increase. so its increase in kiwsaver = increase in property prices. not the other way around.

its almost always more beneficial to buy a house as soon as you can. the catch is if people can see the savings. private funds no one gets to see how much is in it or what its used for. kiwisaver is reported on and people know what its used for. also increasing the default amount of savings also boost saving for housing which increases house prices. ditto if you made KS compulsory. so peoples retirement fund gets used to fund other people housing profits.

what they should have done is made saving for first home optional and additional to retirement saving.