First-home buyers are being told now is the time to strike with cheeky offers on houses, to see if they can get a good deal from an over-stretched investor.

Tony Alexander, BNZ's chief economist, said in his most recent weekly update that the market was moving in favour of first-time buyers.

"A lot of investors have over-extended themselves in the past three years and their hopes of new investors taking property off their hands at a tidy profit have been dashed."

SUPPLIED The next 12 months will bring pain for some investors who bought late in the property cycle, Tony Alexander says.

He said a layer of the "investor pyramid" had been stripped away by the new loan-to-value restrictions, which require landlords to have 40 per cent equity in a deal.

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"Auckland is interesting in that there is now an over-supply of properties which can be intensified. The finance is not there to allow construction, and neither are the builders. So lots of investors are now sitting on potentially highly geared up properties they cannot get anyone to buy and develop."

Some investors were getting worried, he said, that profit they had made on paper over the past couple of years could be disappearing fast.

"The fomo [fear of missing out] which drove them to gear up and buy any old piece of property last year and before is now working in the opposite direction. They are vulnerable as a mass to something. Some trigger."

He said first-home buyers could "take advantage of their pain" by taking their time, looking at a number of properties, and throwing in "low-ball offers in case you catch a truly panicked fish".

"Alternatively, simply make an offer for what you think a place is really worth – and stick with it. Don't let the agent work you. They know that at this point in the housing cycle the effort they need to put in is on the vendor – convincing them that the days of stupid prices have ended. Stick with your price and walk away if they won't budge. If they spray, walk away!"

He said it would not be in first-home buyers' interests for loan-to-value restrictions to be eased, as real estate agencies and the Real Estate Institute have urged.

It would mean they just needed up borrowing more money, he said.

"The last thing you need now that the market is moving in your favour is for extra demand to be thrown into the market with LVR reductions simply to bail out investors who have over-committed themselves."

Banks can lend up to 10 per cent of their loans to borrowers with less than 20 per cent equity, and it is still possible for first-home buyers to get loans with small deposits, especially from non-bank providers such as credit unions.

The latest Reserve Bank data shows first-home buyers borrowed $713 million in home loans June, compared to $3 billion for other owner-occupier's and $1.3 billion for investors.

"Currently my deepest interest is in the vibe of the market," Alexander said.

"I'm looking at the language agents are using in their ads, trying to get a feel for if it is turning, trying to see how much fomo is flipping the other way - investors feeling they need to sell now before prices ease further. Those sort of emotive factors will become dominant this coming year and for a while will hide the underlying fundamental of supply growth remaining well short of demand growth."