By Madison Reidy for Newshub
KiwiSavers are delaying their first home buying dreams as turmoil on financial markets causes savings to slump.
Jill MacDonald lost $10,000 - or 12 percent of her savings - in the past week, leaving her and her fiance short on funds for a mortgage deposit.
"We have to put a stop to potentially moving forward with our decision to try and buy a house this year," she told Newshub.
Instead, they will continue renting a one-bedroom home in central Auckland until their savings recover.
Fears over the economic impact of the COVID-19 coronavirus had hammered global markets in March, which higher growth KiwiSaver funds are invested in.
The United States Dow Jones Industrial Average closed in bear market territory on Thursday (NZT), which was a fall of 20 percent from recent highs.
The NZX 50 had wiped six months' worth of gains in a matter of days. It closed Thursday down almost five percent.
Other keen first home buyers who spoke to Newshub said they would delay property purchases because they had lost KiwiSaver funds or were worried about a recession.
KiwiSaver allowed investors to withdraw funds to buy a home but they were required to live in it for at least six months.
Real estate firm Harcourts Cooper & Co managing director Martin Cooper said three of its first home buyer customers were unexpectedly short of funds in the past week.
"In one case, $9000 [of] their fund had dropped, another case $7000 and in another case it dropped by $4000," Mr Cooper said.
"They went to the banks, the banks said, 'hey, we can't help'. Fortunately, in all cases, the parents have helped out - the bank of mum and dad."
An expected cut in the official cash rate at the end of this month would lower mortgage rates, which could keep first home buyers in the market, he said.
Default KiwiSaver provider Fisher Funds chief investment officer Frank Jasper said some of its customers were panicking.
"For those people who do have a shorter-term horizon, and for whatever reason have found themselves in a high-growth fund, it might be the time to consider if that strategy is right for them."
Meanwhile, Retirement Commissioner Jane Wrightson warned anyone about to give up work to not withdraw their savings in a lump sum and consider moving to a less risky fund.
"If you need the money within three years or less you should be talking to your provider now to see if you should be switching funds."
