First-time buyers in Tauranga are beginning to find their feet after crippling LVR caps hampered the city's property market, according to a local realtor.

It's one year today since the Reserve Bank of New Zealand imposed loan-to-value ratio restrictions, which were viewed as the solution to soaring Auckland and Christchurch house prices.

Realty Service Group chief executive Ross Stanway

The changes saw mortgages with an LVR of more than 90 per cent still restricted to five per cent of new lending, while total new lending for LVRs of more than 80 per cent are restricted to 10 per cent.

Applicants must now have a deposit that is 10 per cent or more of the property's purchase price, replacing the existing requirement for a 15 per cent deposit on lending above $200,000.

Income caps are $80,000 for one buyer and $120,000 for two buyers or more.

Looking back on the last 12 months, Realty Service Group chief executive Ross Stanway will not give the LVR a pass mark, which he believes has had a detrimental effect on the city's property market.

He says the government may now recognise the LVR introduction-originally brought in to effect the two major cities-has in turn had a 'very negative” effect on the regions where there is a lack of 'rampant escalating price increases”.

'I believe it should have been introduced specifically to address the escalating, unrealistic and unsustainable house prices in Auckland and Christchurch,” he said.

'And I believe it could have been introduced to those specific markets rather than just a blunt instrument across the country because there was such a difference in the market compared to those two centres.”

In the first eight months following the introduction, the level of Tauranga City's first-home buyers slumped, while median house prices have risen five per cent in the last year.

It is only in the last four months that Ross has noticed first-home buyer interest beginning to pique again, with a number of banks able to consider a 'wider range” of mortgage application.

The media house price has also levelled off following the uptake in interest.

Ross added: 'The Reserve Bank may well look back and say ‘well it did slow the volume of sales' and it certainly did that.

'But I think people who have tried to buy a house in Auckland and Christchurch would still be facing the same problems as 12 months ago.”