The Reserve Bank will consider easing restrictions on mortgage lending before removing them altogether, Radio New Zealand reports.
The central bank says house price growth is 2.5 percent lower than it would have been without the limits on low deposit loans.
In the first of its twice-yearly reviews, the Reserve Bank says the financial system remains sound, but it warns that high levels of household and dairy farming debt remain a threat if there's an economic shock to the country. (The Wireless' Elle Hunt explained the restrictions last year.)
Deputy governor Grant Spencer says the mortgage lending restrictions introduced in October are working, and along with higher interest rates and more house building, should help cool the market.
Mr Spencer says the restrictions could be lifted by the end of the year, but the central bank will consider easing them first. He reiterated that the restrictions will be temporary, saying they lose their effectiveness over time.
