Debt-to-income (DTI) rules are likely to hit investors harder than first-home buyers, as interest rates fall further over the coming year.

DTIs took effect in July, but at that point high interest rates were more of a restraint on borrowing.

As rates ease, that could change. Corelogic economist Kelvin Davidson says they could become a greater consideration by the middle of next year.

But he said it was normally investors who were pushing the boundaries of what would be allowed.

The rules mean banks can only lend 20 percent of new borrowing to owner-occupiers with debt that is more than six times household income, and to investors with debt that is seven times income.

Other debt, such as student loans, is included in the calculation.

Davidson said it was a significant change for the property market.

"It's a landscape shift compared to previously when interest rate falls led to bigger loan sizes and put upward pressure on house prices. It is a pretty big change and it will take some time to get used to it."

He said it was likely banks would reserve the 20 percent they were allowed to lend at higher DTI ratios for more expensive markets.

"DTIs are about financial stability not targeting the housing market specifically."

Davidson said DTIs might not improve housing affordability in absolute terms but they could help keep prices at a better level than otherwise.

He said investors tended to borrow at higher DTIs.

"Even if you take into account their cap is a bit higher, in 2020 and 2021, 40 percent of investors borrowed at a DTI above seven, whereas 20 percent, 25 percent of first-home buyers borrowed at a DTI higher than six. At the point where loans were largest in relation to incomes, or where it would have had a more significant impact if DTIs already existed, not many first-home buyers would have found themselves battling but a decent chunk of investors would have."

Davidson said DTIs would slow the rate at which investors could build their portfolios.

"If you already have a house with a mortgage against it and one rental or two you might be tapped out on debt until such a time as you can grow your income. It's a slower process than the ability to buy under things like LVRs."

New builds will be exempt.

The most recent data showed 2 percent of first-home buyer borrowing and 3 percent of investor borrowing was at high DTIs.

Davidson said they were being held down by the still-elevated test rates used by banks to check that borrowers could afford a loan.

"At the same time, there's also a sense that some borrowers don't want mega loans anyway (due to job concerns for example) or actually need them either, given that national property values are still 18% below their post-Covid peak."

NZ Property Investors Federation spokesperson Matt Ball agreed DTIs would have an effect next year if the housing market picked up as expected.

"When the banks hit their limits, it will affect all buyer categories, especially in Auckland and any other regions where house prices are high relative to income."

Auckland Property Investors Association general manager Sarina Gibbon said the DTIs were a responsible approach to prevent house prices becoming a "runaway train" in future cycles.

"What's interesting is that while property investment remains a valuable pathway to building wealth for New Zealanders, we have to acknowledge a fundamental truth - you typically need to be able to step onto the housing ladder before you can consider building an investment portfolio.

"So these lending frameworks, including DTIs, actually help create a more balanced market where first-home buyers have a fair shot at entering the market. This balance is crucial for the long-term health of our property sector and the financial well-being of all New Zealanders."

Squirrel mortgage advisers said they could affect lower-income households more because those borrowers might be more likely to have consumer debt such as car loans and personal loans.

"They are also likely to hit high-end, where income cannot be verified, and carry high credit card limits."

-RNZ.