A financial expert is backing Mark Richardson's claim the Government's proposed debt-to-income caps are unlikely to help first home buyers.
The Reserve Bank is looking to restrict lending to house buyers whose debts far outstrip their income - a tool known as debt-to-income (DTI) ratio limits.
Finance Minister Grant Robertson has agreed "in principle" to allow DTIs, which the Reserve Bank has described as "likely to be the most effective additional tool" to help stabilise ballooning house prices.
Robertson said any decision to implement DTIs would only happen after a full public consultation. It's also his view that DTIs should not impact first-home buyers and should only apply to investors.
But there is concern the caps could still hurt first home buyers and low-income earners.
Speaking with The AM Show on Thursday portfolio manager at Milford Asset Management Frances Sweetman said it's not yet known how much of an impact they could have.
She said it depends on where the caps are set, given banks already limit mortgages based on income.
"Already banks test what mortgage payments look like based on your income but this will put a much more formal limit around that.
"Where this can come in is it can limit the amount of debt investors can take on quite low yielding rental properties."
The proposed caps appear to have frustrated sports reader Mark Richardson who questioned how much they would help first home buyers.
"I just can't understand how any of this is going to mean that... all of a sudden you create first home buyers," he said.
"The price of property is not coming down, yes you're taking an element of competition out of auctions and the buying process, but then again investors tend to be a bit more dispassionate and aren't motivated and won't go as hard - once it reaches a point where the yields aren't good enough they just walk away.
"It just feels all too idealistic to say, 'Oh all of a sudden first home buyers can buy houses' - no they can't unless their incomes go up."
Sweetman backed up Richardson's view saying the Government's actions so far haven't motivated investors to sell.
"I'm struggling to disagree with you...what we have seen so far in the market is that investors haven't sold because they struggle to see where they can get a better return elsewhere."
She said house prices are unlikely to drop much until there is more supply and while the Government is working on it, the areas where new homes are being built might not appeal to first home buyers.
The Government unveiled a raft of new measures in March which were designed to make it easier for first-home buyers to get onto the property ladder and crackdown on investors.
While this has caused some investors to drop away from the housing market, the changes haven't caused the market to cool yet with prices instead hitting a new record high in May.