Real estate agents are complaining about banks' lending criteria on apartments.
Martin Dunn of City Sales and Rachel Dovey of Bayleys said tight rules were restricting the market.
But BNZ external relations manager Diane Maxwell said the bank had always taken a relatively conservative approach to lending on inner-city apartments.
"We haven't changed our lending criteria on that this year," she said.
Mike Davy, senior product manager for housing at Westpac, said smaller apartments were a higher risk.
"We still consider purchases with a deposit of 25 per cent for apartments over 50sq m. But we may require a higher deposit for smaller apartments," he said.
Dunn criticised banks taking a harder-line approach to apartments than houses
"It has always been hard for first home buyers to get funding but we have given up trying to persuade the banks. It is easier to buy a dump in Manurewa with pitbulls and Holdens on blocks in the yard than a cute apartment with a 9 per cent return and a student who has been there two years and not so much as marked a wall," Dunn said.
"We think apartments represent bargain-basement buying."
Rachel Dovey said first-home buyers were being disadvantaged because banks required a 35 per cent deposit for units smaller than 50sq m. Buyers needed a $70,000 deposit on a $200,000 two-bedroom apartment but only a $56,000 deposit for a $280,000 three-bedroom home. She said that skewed the apartment sale market in investors' favour.