The paper develops an overlapping generations model incorporating a realistic depiction of the credit constraints facing home buyers to explain why home ownerships rates have declined in New Zealand since 1990 despite a significant relaxation of credit constraints. The model focuses attention on the role of property investors in the property market, and suggests changes in credit constraints mainly affect the tenure decisions of individual households, but not the aggregate level of house prices. The model suggests the decline in real interest rates is likely to be the cause of the rise in house prices and the decline in home ownership rates since 1990.