Big valuation jumps paying for homeowners' do-ups + video

"People are borrowing $30,000 to $40,000 to do a kitchen or a bathroom but bigger home renovations are in the hundreds of thousands," Patten said.

Auckland homeowners made wealthy by their latest Auckland Council valuations are borrowing to do up their houses.

LoanMarket mortgage adviser Bruce Patten said average loan sizes at his business had dropped after the valuations came out.

That indicated to him that more people were borrowing for renovations or landscaping jobs.

"People are borrowing $30,000 to $40,000 to do a kitchen or a bathroom but bigger home renovations are in the hundreds of thousands," Patten said.

See video: Bruce Patten on the NZ property market

Before the end of last year when loan to value ratios were introduced to reduce risky borrowing, about 15 per cent of his clients had been first-home buyers.

"Now that's only about 5 per cent," he said.

But landlord borrowing had risen, particularly from borrowers with a single house with a small or no mortgage who were using that equity to buy another place.

Patten said more parents were helping their children buy houses and his firm was dealing with family equity, family pledge or limited guarantor loans. The biggest trap here was parents expecting children to repay mortgages and not realising the down side of such arrangements, he said.

The parents' family home could be on the line if repayments were not made, he said.

People should obtain legal advice before committing to such arrangements.

Institute of Economic Research principal economist Shamubeel Eaqub said Aucklanders were not using their houses like ATM machines, as they had last decade, but were showing more restraint.