New Zealand's largest banking group has doubled its minimum mortgage deposit, leaving would-be homebuyers needing to find tens of thousands more before buying.
From today, customers of the ANZ and National will need a 20 per cent deposit, as the banks will not be offering loans for more than 80 per cent of the purchase price.
Borrowers previously needed only a 10 per cent deposit.
Between them, ANZ/National finance more than a third of all New Zealand's home loans.
The latest change will mean a person looking to buy an Auckland property at the median price of $433,000 will need a $86,600 deposit.
Median house buyers in Wellington will need to stump up $73,800 on a $369,000 property, and those in Christchurch will need to find $62,000 on the $310,000 median-priced house.
Other major banks ASB and Westpac decide minimum deposits case by case, though ASB spokeswoman Debby Bell said the bank instructed its staff "generally" to look for a minimum deposit of about 20 per cent.
However, that deposit was based on a customer's ability to repay debt, she said.
Auckland couple Anna and Casey Henwood said yesterday that they were among the lucky ones - having "just snuck in" before their bank made buying a house more expensive.
They said they had cut costs and luxuries for the past year while saving the required 10 per cent deposit and were thrilled when approaching National for a loan.
But their dream of home ownership could have been delayed significantly had they put off going to the bank just a couple of days, Mrs Henwood said.
"If we had been a few days late, it would be at least another six months to a year to save. We were just very lucky to get in - it must've been just a couple of days [before the increase] when we applied."
Mrs Henwood - who with her husband, a NZ hockey rep at the Beijing Olympics, are renting with another couple in Remuera - says renting and buying a house in Auckland is much more expensive than in other parts of the country.
But work opportunities and higher salaries had forced them to stay in Auckland.
She acknowledged the difficulties first-time buyers would now face and the predicament she and her husband would have been in had they had to save a 20 per cent deposit.
"We're looking at a place around the city, because of work - but if we hadn't got it, we would've been forced to move further out," Mrs Henwood said.
"We're planning to go to Thailand in May - we wouldn't have been able to do that because that's another $5000 that could go towards the house. No holiday at all."
Professor Bob Hargreaves, who heads Massey University's real estate analysis unit, said rationing credit was a natural reaction to the global financial turmoil.
"People are re-pricing risk. Banks are finding it harder to obtain the overseas money that we rely on because it's more expensive.
"I would say it's one way of throttling demand. Banks are saying, 'OK we're still in the business of lending to people but you have to put more in yourself.' In good times they're your best friend; in not-so-good times they can be quite tough."
A higher deposit rate also offered a buffer if house prices kept falling. Lending 90 per cent of the mortgage meant banks were "exposed" to risk quicker if people found themselves with houses worth less than the original loan.
While his unit's last home affordability survey in September had shown "slight" improvements over the past three quarters for home-buyers, things were still grim.
On an annual basis, national affordability improved 4.1 per cent because of average weekly wages increasing, as well as mortgage rates and house prices trending down.
However, research showed those renting rated saving a deposit to be the biggest barrier to home ownership.
New Zealanders were not great savers, Professor Hargreaves said. "If you suddenly double the amount you require, then it is going take people longer to get that together."
In a statement, ANZ/National said the adjustment reflected the complex global situation and the continued softening of the property market, but other factors such as reduced consumer spending and rising unemployment were also coming into play.