Rules drive buyers away

Property consultant Matthew Gilligan said there had been a "mini crash" in South Auckland, and other cheaper areas would also be affected.

CoreLogic statistics show first-home buyers have dropped out of many parts of Auckland where they used to dominate.

In Massey, West Auckland, the proportion of first-time buyers has dropped from 39 per cent to 29 over the past few months, and Glendene from 33 per cent to 15.

In South Auckland, Mangere's proportion of first-time buyers dropped from 35 per cent to 14.

Already there are signs of price decline. Glendene's February median price was $485,000, down from $514,000 in October, and Panmure's dropped from $575,000 in October to $508,500 in February.

Property commentator Olly Newland had two clients who bought entry-level properties to do them up and sell, but were stuck with them.

"People can't come up with 20 per cent. Even on a $350,000 property, $70,000 is a hell of a lot for a young couple to put together."

Real Estate Institute chief Helen O'Sullivan said investors who used equity in their existing properties to buy new ones had also been slowed by the bank rules.

Regional centres have also noticed a marked decline in sales. Hamilton, Rotorua and Napier reported drops of about 5 per cent in first-home buyer participation.