Builders say they have seen inquiries drop by more than a quarter since the introduction of loan-to-value restrictions.
The Registered Master Builders Federation has been vocal about its opposition to the rules. It says they should not be applied to new homes that address the supply side of the housing shortage.
The organisation estimates that low-deposit buyers represent about 15% to 20% of new residential construction.
Chief executive Warwick Quinn said the restrictions had prompted a 10% increase in cancelled orders.
"We have also seen a fall in inquiry levels of 27%. We put this difference down to vendors not being able to sell existing homes to commission new ones and buyers with more than 20% deposit not progressing as they may be concerned about not being able to fund increased costs during construction."
He said the change would not be reflected in building consent statistics for a while yet. A drop might be seen in March.
His organisation says any reduction in supply is counterproductive to the LVR policy.