Independent economist Tony Alexander's latest quarterly survey found banks have "noticeably tightened up their lending criteria and processing times for mortgage applications" causing issues for borrowers and mortgage brokers.
Processing times for mortgages have been "blown out because of staff shortages", the survey found, with "existing customers given priority over new to bank clients".
Alexander, the keynote speaker at last year's TMM Better Business Conference, conducts a quarterly survey of the NZ marketplace, based on feedback from workers in different sectors.
The survey for the March quarter took in the views of more than 450 people.
Commercial investors, residential investors and owner-occupiers were hit by bank tightening in the first few months of the year, according to the survey.
One broker shared his concerns about the lack of staff working for the major lenders.
"I feel volumes are normal for this time of year but banks' turnaround times for loan approvals are extremely poor. [I] feel they are majorly understaffed. [I'm] concerned what they are going to do when the market surges as no contingency plan seems to be in place."
An Auckland-based broker agreed: "Some major banks [are] under pressure with volumes. All are slow. BNZ [are] only accepting pre-approval deals for their own customers – [with] staff doing weekend overtime. ANZ [are taking] 5-7 business days for an answer and [their] own customers [are being] prioritised. They report that volumes are the highest they have seen."
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