Proportion of new house buyers has dropped in wake of bank restrictions, survey says.

The proportion of first-home buyers in the market has declined in most of the main centres since mortgage-lending restrictions came in six months ago, a report says.

Of the 22 areas surveyed by property data company CoreLogic, just four had increased slightly.

The survey compared the percentage of home sales going to first-home buyers in the three months before the Reserve Bank changes took effect on October 1 last year, to figures from December, January and February. The number had dropped nationally by 1.1 percentage points.

The Auckland areas of North Shore, Waitakere and Manukau all dropped.

Auckland city - which has more apartments suitable for new homeowners - rose from 15.7 per cent to 16.7 per cent.

Hamilton, Tauranga and Wellington dropped as well, with Queenstown and Rotorua falling the most - by 5.3 and 5.1 percentage points.


CoreLogic defined a first-home-buyer transaction as one where none of the new owners have owned property in New Zealand previously, and they have also taken out a mortgage.

There was a slight correlation between price and the suburbs first-home owners were buying in.

Suburbs with a big increase in first-home buyers had also increased in value by more than suburbs with a big decrease in first-home buyers, including New Lynn (19.6 per cent annual value increase), Weymouth (16.6 per cent), Chatswood (14.9 per cent) and Cockle Bay (9.2 per cent).

Those that had fewer first-home buyers included Onehunga (9.2 per cent value decrease), Halfmoon Bay (-9.7 per cent), Flat Bush (-11.3 per cent) and Glendene (-17.6 per cent).

The number of house sales overall has also decreased. The latest Real Estate Institute figures show there were 6125 homes sold in February, down 7.6 per cent on the previous February.

Home-loan changes introduced by the Reserve Bank in October restricted the amount of high loan-to-value ratio (LVR) loans that banks can issue.

Banks can now make fewer loans to customers with less than a 20 per cent mortgage deposit. The change, which aimed to take some of the heat out of a rapidly rising property market, has been criticised for unfairly affecting first-home buyers who would find it more difficult to raise a 20 per cent deposit.

Reserve Bank deputy governor Grant Spencer has previously said that as interest rates moved back to more normal levels "we will expect to have greater scope to ease or remove the LVR restrictions".


NZ Institute of Economic Research principal economist Shamubeel Eaqub said he expected the restrictions to be eased over the next two years, and exemptions had already been made such as for newly built homes.

"When we look at other countries around the world that have used LVR restrictions, once they have implemented it, they might change it, but they hardly ever get rid of it."

Mr Eaqub said the changes appeared to have dampened demand from first-home buyers.

"When I look at the overall impact, it's not clear. When I look at what's happened with the growth of mortgage approvals, there is a little bit of disruption ... but we don't see a big impact. The growth in the market had been coming off for quite some time.

"Whether it was because of the LVR restrictions or because house prices have just become so ridiculously expensive that it's turning people off, we don't know."

The February figures from the Real Estate Institute of NZ show a national median price of $415,000, $33,000 up on February 2013.

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additional reporting: Nicholas Jones