Certified Builders Association of New Zealand, which has its headquarters in Tauranga, is the country's largest building trade organisation and is urging the Reserve Bank to review its Loan to Valuation Ratio (LVR) policy and exempt new home building from the policy.
Certified Builders chief executive Grant Florence says the LVR restrictions are having a major impact on sales enquiries, which will ultimately impact building activity in New Zealand.
"The impact has been felt here in the Bay of Plenty.
"There's been a drop-off in confidence even for those buyers who aren't necessarily affected by the lower deposit regime. People are saying there is something there that's not quite right, so they are putting things on hold," he said.
"We are concerned, and have received some anecdotal feedback from our members, that this policy is having a negative impact on new home buyers' confidence, and home buyers are viewing this uncertainty negatively.