"I think that the key issue here is that we are looking at a proposed regime that is being put in place to deal with a rampant market in quite a specific area, that being Auckland and Christchurch.
"So a broad-brush approach is going to be quite unfortunate because in our region, Tauranga and the Mount, we absolutely are not affected by the same escalating prices as in Auckland and Christchurch and yet it seems as if the Government is determined to somehow make a correction in Auckland and Christchurch by applying something across the country, and that just doesn't seem to make good market sense."
Majesty Mortgage Broker director Luke Turner said about 70 per cent of his customers were first-home buyers and most had a deposit of less than 20 per cent of the property's total value.
Each bank was only allowed to make a certain percentage of low-deposit loans, so the role of a mortgage broker could become more necessary for first-home buyers because the broker would know which banks to target, Mr Turner said.
Tauranga Property Investors Association (TPIA) president Grant Harris said he believed restrictions would have a negative effect on property investors making new purchases, but would keep costs down by limiting the requirement for interest rates to increase.
"The TPIA, and the NZ Property Investors Federation, believe it is prudent for homeowners and investors to have a reasonable level of equity in the property they own, so restricting loan-to-value ratio levels makes sense.
"If the strategy has any chance of working then it must apply to all property purchasers, including first-home buyers. We believe that a 20 per cent deposit requirement would be too restrictive and that 15 per cent would be more appropriate."
The Lakes general manager, Scott Adams, said the move would put pressure on land developers and builders to lower their costs to provide more affordable housing, however councils were not helping with increasing rates and subdivision impact fees.