Loan limits hit builders
Master builders say inquiries from potential home buyers for new houses have fallen 30 per cent since the introduction of limits on bank lending.
Registered Master Builders is lobbying hard for an exemption to the loan restrictions for those building new houses.
The organisation has met with the Reserve Bank twice to discuss the central bank rules that kicked in from October 1.
Master Builders chief executive Warwick Quinn said the numbers of inquiries to builders from prospective home buyers had dropped about 30 per cent since then.
"We're wanting an exemption really . . . so all new [home] construction is exempted from the LVR policy."
The central bank's aim with the loan to value ratio (LVR) restrictions is to protect the stability of the financial system.
It was not only first-home buyers, with little equity, who were impacted by the new LVR rules but other buyers who were selling their homes to fund a second home purchase or a newly constructed home, Quinn said.
When the sales chain was broken, many purchasers could be impacted, Quinn said.
The bank wanted extra data on the impact of the LVRs.
Registered Master Builders continued to work with BRANZ (Building Research Association NZ) to find out how harshly building firms were being impacted. BRANZ was also surveying recent homeowners.
The association hoped to meet again with the Reserve Bank in late November, to further discuss any exemption.
Registered Master Builders expected just over 20,000 new homes to be built nationally in 2013.