New home loan restrictions are expected to slow already struggling building rates, according to one Wanganui builder.

The Reserve Bank this month tightened loan regulations, raising deposits for house buyers to 20 per cent in many cases, and that is shutting Wanganui house-hunters out of the market.

Watson Building project manager Shayne Perry said Wanganui building rates had been slow anyway, but the changes would "obviously" have a detrimental effect.

"I still can't see the sense of it. It's bad enough trying to get anything moving around this area - there are no wages, people just haven't got that money."


The only way to kick off the housing market was to get first-home buyers into houses.

"If you delay that a few years, that delays everybody and the money doesn't go around anymore," Mr Perry said.

There have been calls for newly built homes to be exempt from the Reserve Bank policy, and it has agreed to re-examine its new mortgage lending restrictions if data shows they are crimping the supply of new homes.

The Master Builders Federation and building industry group Branz are working with the Reserve Bank to assess the impact of the restrictions on people borrowing to build new homes.

Statistics NZ figures show the number of building consents issued in Wanganui/Manawatu dropped from 47 to 35 from July to August this year, compared with 43 in August last year.

Master Builders head Warwick Quinn said that three or four weeks before the policy took effect, "we started to see quite a drastic reduction in some builders' workloads and potential contracts".