However, banks have been warned to closely scrutinise their dairy sector loans.
The most recently implemented housing restraints have been loan to value (LVR) restrictions on deposits of Auckland investors, rising from 20% to 30%, while elsewhere in the country the restriction was relaxed to 15%, plus there are now tax obligations for people selling an investment house owned for less than two years.
The indebted dairy sector came in for increased scrutiny by Reserve Bank governor Graeme Wheeler in his Financial Stability Report for November, released yesterday, saying banks had to be ''realistic'' about the ''likely increase in problem loans''.
The Reserve Bank has requested the five biggest lenders to the dairy sector - ASB Bank, ANZ Bank New Zealand, Bank of New Zealand, Westpac New Zealand and Rabobank New Zealand - to stress test their portfolios, which the Reserve Bank sees as a growing risk to the health of the nation's financial stability, BusinessDesk reported.
The regulator was encouraged by ''realistic provisions'' set aside for the portfolios, and its modelling suggests a sustained downturn would be manageable for the wider system.
''The dairy sector faces a second consecutive season of weak cash flow due to low international dairy commodity prices,'' Mr Wheeler said.
''[Dairy] prices have shown some recovery since August, but many indebted farms are coming under increased pressure, which would be exacerbated if low dairy prices are sustained or dairy farm prices fall significantly,'' he said in the report.
Opposition parties rounded on the stability report, Labour's finance spokesman, Grant Robertson, accusing Finance Minister Bill English of ignoring the Reserve Bank's repeated reports.
He said Auckland's housing bubble had spread to Hamilton and Tauranga - encompassing three of New Zealand's five biggest cities.
''National has completely failed to deal with this, shown by just 100 homes being built under the failed Auckland housing accord,'' Mr Robertson said in a statement.
Green Party finance spokeswoman Julie Anne Genter said the stability report ''echoed warnings'' in an International Monetary Fund statement, that rampant house price inflation, fuelled by Auckland property speculation, was a serious risk to New Zealand's economy.
''National finally took a tiny step in the right direction with the two-year bright line test, but the reality is the proposed law before the House has too many loopholes and is too limited in scope to make a substantial difference in curbing speculation,'' she said in a statement yesterday.
Mr Wheeler said Auckland's house price growth had increased strongly with house price-to-income ratios in the region now comparable to those seen in some of the world's most expensive cities.
''A sharp downturn could challenge financial stability, given the large exposure of the banking system to the Auckland housing market,'' he said.
ASB chief economist Nick Tuffley said the Reserve Bank saw overall financial risks to the economy as higher, an assessment to be expected given house prices were higher and the dairy outlook was weaker than in the May stability report.
Mr Tuffley said while still expecting a 25 basis point cut to the interest driving official cash rate in December, the ASB's inflation outlook was so low he saw some risk of even further OCR cuts in 2016.
Reserve Bank deputy governor Grant Spencer said the banks were working with dairy farmers experiencing difficulty, and it was important they continued to take a medium-term view when assessing farm viability.
''The banks' losses on dairy exposures are expected to be manageable, but banks need to ensure that they set aside realistic provisions for the likely increase in problem loans,'' Mr Spencer said,Mr Tuffley said no fresh housing measures were announced yesterday, noting the latest LVR restrictions had only just taken effect this month.
There has been sector speculation of a new debt-to-income limit to be placed on borrowers, but Mr Tuffley said that issue required ''a lot of background work first''.
Mr Spencer said the Reserve Bank had ''a number of other regulatory initiatives in train''.
''Public consultation has recently closed on a stocktake of banking regulations and a summary of submissions will be published shortly,'' he said.
