Real estate agents say first-home buyers are deserting the market as the loan-to-value restrictions take effect.
In the latest BNZ/REINZ survey of real estate agents, 78% said they were seeing fewer first-home buyers than in the previous month.
Banks must now restrict their new lending to people with a deposit of less than 20% to no more than one in ten of their loans.
But the survey found that while first-home buyers are holding back, price rises are only being marginally limited.
A net 23% of agents thought that house prices were still rising, compared with 41% in October and 51% in September. A reading of 0% would indicate that agent opinion was evenly split.
But a net 17% now say that it is a buyer’s market, from a net 11% who thought it was a seller’s market last month.
A net 6% of agents said they were seeing more investors looking to buy property. Some said they were operating without the emotion of first-home buyers, which was causing a gap between the price that buyers were prepared to pay and what sellers wanted to accept.
Open home attendance seems to have dropped markedly. When asked whether they were seeing fewer people coming through open homes than in previous months, agents’ responses were the weakest on record.
A net 12% said they had seen fewer written sales go through to completion because buyers had backed out of deals. A net 28% said auction clearance rates had declined.