Introducing an income cap to try to curb the overheated Auckland property market would hit first home buyers hardest, says a mortgage broker.
Reserve Bank governor Graeme Wheeler yesterday signalled further house lending restrictions, which he called 'macroprudential', were on the cards.
The Reserve Bank is considering debt-to-income restrictions, which would require government approval.
Loanmarket broker Bruce Patten told Morning Report a cap would be the completely wrong thing to do.
He said first home buyers would be the hardest hit by such rules, because they were generally young and on lower incomes.
"They would be much better off to broaden the investment LVR (Loan to Value Ratio) restrictions through the whole country, to stop what is happening now, which is people moving out of Auckland to buy in other areas. So if they increase the LVR level that would have a better effect than bringing in an income cap."
Mr Patten said there was still too much pussy footing around, in terms of freeing up land for new houses.
Yesterday, as the Reserve Bank released its latest Financial Stability Report, Mr Wheeler said imbalances in the housing market, along with dairy prices, had increased the risks to the country's financial stability.