Those in the market for their first home will need to stump up with tens of thousands of extra dollars when lending is tightened to those with low deposits.
The Reserve Bank is tightening low-deposit lending rules. Photo: Dom Thomas
The Reserve Bank is halving the amount of low-deposit lending banks can do, from 20 percent to 10 percent, and banks could act earlier than the October deadline.
CoreLogic has crunched the numbers to see how hard hit first home buyers will be and found that in Auckland it's an extra $90,000 for a deposit.
Its senior property economist Kelvin Davidson said that's a lot more money to save.
"That's going to take a bit of saving to get there and that's on top of what you've already got to save so that's going to put some pressure on."
CoreLogic's calculations show first home buyers will need scrounge together an extra $50,000 in Christchurch, up to $81,000 in Wellington and $90,000 in Auckland.
Davidson says most low-deposit lending has been for first home buyers.
"This is going to be a pretty significant change I think, it just adds to a lot of other pressures we're seeing in the housing market that will act to slow it down."
The First Home Buyers Club provides advice and information to those entering the property market.
Its director, Lesley Harris, said the upcoming tightening of low deposit lending is not good news for first home buyers who have also faced rising prices.
CoreLogic figures show in June first home buyers paid a median price of $685,275 across New Zealand, about $150,000 more than in June last year.
"It's not great news because it's signalling banks to be more cautious and tight around that low deposit lending," she said.
"My question is when are we actually going to come up with something that's going to help not hinder a first home buyer actually getting into the property market?"
But Harris said the limited low deposit lending will likely go to first home buyers.
"The question then goes how do banks see this rule, are they going to make some kind of legislation around that small bit of low deposit lending reserve for first home buyers?"
In the meantime, those searching listings are getting more creative.
"We're seeing more different forms of ownership, we're seeing parents leveraging their properties and groups going in together."
Davidson said it might also propel more first home buyers towards new builds, which are exempt from loan to value ratios, but that market had its own challenges including rising construction costs.