Loan-to-value restrictions were officially introduced this week, limiting banks' ability to lend to property investors with less than 40% equity in the deal.
While the rules became official on October 1, banks had been required to act in the spirit of the restriction since it was first announced.
That has led to a slowdown of activity in some areas.
QV said demand for bank-ordered valuations was a good indicator of future sales. In Tauranga, demand had dropped significantly. Hamilton was down about 5% and Whangarei was below its winter levels.
All three centres had previously benefited from the fact they were close to Auckland – but investors only needed a 20% deposit, rather than the 30% previously required in Auckland.
Analyst Nick Goodall said Auckland too had been affected – demand had not picked up as it usually would at this time of year.
“In Auckland [demand for valuations] remains flat compared to activity prior to the LVR announcement in late July. This is seasonally very weak as we would have expected activity from mid-winter to pick up in September,” he said.
But he said the factors driving house prices rises were still present, such as low interest rates, strong migration, and a lack of housing supply.
“All of this means it’s unlikely that values will be heading south any time soon, which will no doubt continue to draw the attention of both the Government and RBNZ. My pick? More intervention to come.”
BNZ chief economist Tony Alexander agreed. He said the market was in a holding pattern that was likely to last only a couple more months.
“That means the Reserve Bank will probably raise the minimum from 40% next year and implement restrictions on mortgage sizes as a multiple of household incomes of the borrowers. As always as has been our key point since the middle of 2009, the incentive for people contemplating making a purchase remains buy now rather than wait when prices will be higher and lending restrictions tougher.”
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