ANZ this week confirmed it would not provide investor loans above 60% LVR, dealing a blow to investors as we enter the new year.
The bank said it would clamp down on investors as "current settings could lock many first home buyers out of home ownership".
It has also asked the RBNZ to impose 60% LVR speed limits for investors.
In his latest update to the market, economist Tony Alexander said 40% deposits imposed by the RBNZ in 2016 "saw the ending of the upward part of Auckland’s house price cycle and a halving of the average monthly rate of increase in prices in the rest of the country. What this previous experience tells us is that if the house price cycle is due for a rest, then 40% is effective."
But that might not happen this time, he said.
"Auckland re-engaged on the upward leg of its cycle only late last year and is not over-stretched. Therefore, it is unlikely that this time around monthly price gains will settle down around 0%. An eventual settling late next year near 1% is most likely.
"But 40% for the rest of the country will be interesting, given that the regions have been on a tear since roughly 2015-16," he added.