Auckland's blistering house prices could soon be exported to the cities of Hamilton, Tauranga and Whangerei, mortgage brokers fear.
This week, BNZ will be the last of the big Aussie banks to introduce tough lending rules for investors which are designed to curb house price frenzy.
Rivals, ASB, ANZ and Westpac have already cut back on lending to investors with less than 30 per cent deposits, or security, for properties.
BNZ says it will follow suit on Friday August 14.
The deadline for bringing in loan to value (LVR) restrictions on investors is supposed to be October 1.
But the Auckland housing market is so hot that the Reserve Bank has made no secret of its desire for banks to fall into line before that.
And already some of Auckland's mortgage brokers are seeing house buyers eyeing up opportunities further afield.
John Bolton from Squirrel Mortgages said it was a trend among Squirrel's investor clients, and Campbell Hastie from The Go2Guys said he'd seen a similar shift in some investors' focus, but added: "I'm also seeing first home buyers making the same kind of horizon change as well."
While Bolton believes the weight of Auckland investor money will result in concerns for home buyers in other cities, Hastie says he doesn't expect any inter-city name-calling.
Andrew King, executive officer of the NZ Property Investors' Federation, says high prices and low rental yields in Auckland have already spurred many Auckland investors to turn their sights on Hamilton and Tauranga, but he added the LVR restrictions would fuel the trend.
"If you are selling, you will think it is lovely, and if you are buying you won't think it's great," he says.
Property expert Rodney Dickens from Strategic Risk Analysis added: "The key thing is the boom in Auckland prices has been so long, it has made prices look cheap in places like Hamilton, Tauranga and Whangarei."
The LVR restrictions in Auckland would just add to the attraction of investing outside of the metropolis.
Tony Begbie president of the Waikato Property Investors's Association says locally based investors had mixed views on the wave of Auckland money hitting the market there.
"The ones that are not wanting to buy are happy, but the ones who are wanting to buy are not," he said. "The Aucklanders are outbidding them on properties and perhaps not doing their numbers properly."
Daryl Fisher, a property investor and Harcourts real estate agent, says around 50 per cent of buyers of homes in Hamilton were now Aucklanders.
Fisher says there is a feeling Hamilton missed out on capital gains last year, and says there were around 5000 too few homes being built in the city each year.
Figures from the Real Estate Institute show the price of a median house in Hamilton rose 5 per cent in the year to the end of June.
In Auckland, the rise was 25 per cent.
Fisher dismissed the idea of the kind of anger directed at non-resident investors that has been voiced in Auckland surfacing in Hamilton.
"I don't think anybody minds. It's New Zealanders investing in New Zealand."
An ANZ spokesman said the Reserve Bank had asked banks to act in the spirit of the LVR restriction changes in advance of the formal implementation date.
"As such, we have taken steps to ensure we comply with the spirit of the restrictions. We are not issuing any new pre-approvals or approvals for over 70 per cent LVRs if the purpose of the loan or top-up is to buy an investment property in the Auckland Council area," he said, though added: "Our intention is to honour all our existing pre-approvals and loan approvals for customers until they expire."
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