Property research firm CoreLogic economist Kelvin Davidson said first-time home buyers continued to be a force in the market. Photo: 123rf
Competition for entry-level homes could be heating up again following an easing of bank lending restrictions on residential mortgages.
The Reserve Bank eased loan to value (LVR) restrictions on 1 June to benefit investors with a 35 to 40 percent deposit.
That saw an 18 percent increase in LVR lending to that group in the following month.
Property research firm CoreLogic economist Kelvin Davidson said first-time home buyers continued to be a force in the market, but there was potential for change.
"The continued strength of first-home buyers is noteworthy, but we should also be keeping an eye on investors - they might start to bring a little more competition back to the market," he said.
"Looking ahead, mortgaged multiple property owners could be a key group to keep an eye on, especially if National happened to win the election, and potentially reinstated mortgage interest deductibility as well as a shorter brightline test."
The previous LVR settings were put in place in November 2021, when economic risks posed by the housing market were elevated.