Up to 5000 apartment buyers could be left tens of thousands of dollars in debt after borrowing deposits for unbuilt units they cannot get the remaining funds for.
Martin Dunn, of estate agency City Sales, said Australian banks had "pulled the plug" on the New Zealand apartment market and were refusing to give would-be buyers the remaining 90 per cent for their mortgage.
Dunn said this had occurred to "unsophisticated investors" who had purchased Auckland central apartments off the plans at property seminars, often "on the spot".
They had been granted loans to pay for their deposits but when they had gone back to their banks to seek the remaining money they had been turned down.
City Sales was attempting to sell off many of the apartments on behalf of the worried buyers.