"I understand what they're trying to achieve, but my fear is that it's impacting most at the affordable end," he said.
Brown said he would "coolly assess" the impact of the loan policy changes before visiting Reserve Bank governor Graeme Wheeler to seek exemptions for first-time Auckland homebuyers.
"We're just building another great big blip of people incapable of buying homes," Brown said.
The Reserve Bank's new loan-to-value (LVR) policy was intended to dampen the booming Auckland market by requiring buyers to have at least 20 per cent of a house's value before they can get a loan.
But new figures show first home buyers are being forced out of the market while property investors make a killing.
Real estate agents and mortgage brokers say interest from first-home buyers has dropped dramatically since the mortgage rules changed at the beginning of the month.
Auckland Property Investors Association president David Whitburn said agents were receiving 60 per cent fewer calls from first-home buyers than they were this time last month.
But just as many properties were still being sold, because investors were in the market to snap them up.
Whitburn said: "There are fewer people at auctions and definitely fewer buyers. As a result, it is easier for me as a professional property investor to get good deals."
Real estate agent Amy Anderson said first-home buyers were no longer coming through open homes.
"They often weren't in a position to buy, regardless, because of the price increases," she said. "Now with the 20 per cent requirement as well, they've stopped coming to look because it's completely hopeless."
Mortgage broker Joel Oliver said he had to tell three-quarters of all first-home buyers that he could not help them get a mortgage.
"But on the flip side, I work with a lot of investors and there's quite an elevated amount of inquiry for investment properties because there's less competition."
Property investor Sara Hartigan said the LVR change was "the best thing that's ever happened".
She is a trader and investor primarily in South Auckland and has bought four new properties in the past two weeks.
"Previously, every muppet was going to the bank and getting a five or 10 per cent loan," she said.
And they were so scared they weren't going to be able to get a home that they were going to auction and bidding furiously, driving prices up $30,000, $40,000 or $50,000."
She said it made it hard for investors when first-home buyers paid top dollar and pushed up prices. "People were doing no due diligence ... just buying out of desperation then found they couldn't afford the mortgage and the whole family had to move in with them."
Ivor Jacobsen settled the deal on a new investment property in Manurewa on Friday.
He said the LVR limits would not slow his plans to buy an investment property every six months or so.
Imogen Haines and Darren Meredith shifted to west Auckland to keep rental costs down and have lived off one wage for two years in an effort to get into their own home.
They began househunting in earnest six weeks ago and visited around 50 open homes in Auckland's affordable western suburbs.
Yesterday's auction was the first time they put their money on the line.
Haines was philosophical about the outcome.
"I feel fine. It's pretty much what I was expecting."
Today, it's back to square one for the couple.
