It's now easier for first-home buyers to get a bank a loan.
From Tuesday, banks are able to lend 20 percent of new loans to owner-occupiers with less than a 20 percent deposit.
ASB chief economist Nick Tuffley says it's a positive step.
"For those people who have ample income to service a mortgage, yet haven't had a big enough deposit… those people should find it easier to obtain a loan."
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Banks had previously only been able to lend 15 percent to the same group. It's hoped the change will make it easier for first-home buyers to enter the market.
"Banks have only been able to lend 15 percent of their new lending to owner-occupiers with less than a 20 percent deposit - moving up to 20 percent of all new loans gives that extra headroom," says Mr Tuffley.
"Both mortgage credit growth and house price inflation have eased to more sustainable rates, reducing the riskiness of banks' new housing lending," Reserve Bank governor Adrian Orr said in November.
"In response, we are easing our LVR restrictions on banks' new mortgage loans. If banks' lending standards are maintained, we expect to further ease LVR restrictions over the next few years."
Mr Tuffley says low interest rates will also affect the market this year.
"It is likely we will see a little bit of a lift in home sales - certainly first-home buyer interest in the market in the early parts of the year."
Strong migration in Auckland will also lift the market, he says.
Banks will also be able to lend 5 percent of new loans to investors with a deposit of less than 30 percent, down from the previous 35 percent limit.
Newshub.
