The Property Investors Federation is blaming first home buyers for the housing crisis, warning that by taking rental properties off the market they're making it worse.
Speaking to RNZ on Tuesday, executive officer Sharon Cullwick argued that while property investors aren't helping solve the crisis, they're not the problem.
"If a first home buyer purchases a property that was a rental property, then you'll need another house to house the extra people living in that rental house," she told reporter Eva Corlett.
"So every time a first home buyer buys a house - even though it's great they are getting into the market - it actually makes the housing crisis worse."
Property prices have continued to increase in New Zealand despite the COVID-19 pandemic, resulting in job losses and recession.
In March the Reserve Bank aggressively cut the official cash rate from 1 to 0.25 percent to stimulate the economy. But the cheap loans have fueled housing borrowing.
Property listing data from realestate.co.nz for October shows the national average asking price increased by 12.4 percent year-on-year to $772,288 with demand continuing to exceed supply.
Ajay Kumar, managing director of mortgage broker company Global Finance, told RNZ the rise in house prices gives investors an advantage over first home buyers as they have more equity to leverage off.
"For first home buyers they still have to arrange a deposit for 10 percent or 20 percent, but for investors, those who have equities in property, they can buy without having that deposit because they already have that much equity in their existing property."
Economist Cameron Bagrie warns locking people out of the housing market will worsen existing social issues.
"Say you're borrowing half-a-million, which a few years ago seemed like an awful lot of money, even if you're paying 3 percent - above where the market is at the moment - what's it going to cost you? $15,000. If you're paying 2 percent, it's going to cost you $10,000. Somewhere between $200 and $300 a week. You can't rent a place for between $200 and $300 a week," he told The AM Show last month.
"Sad thing about this, income inequality and housing affordability - the two big social issues of our time - well, they're going to get worse."
