The Reserve Bank says its restriction on providing mortgages to people with small deposits is working.
High loan-to-value ratio mortgage lending has fallen to 5.6 percent of total mortgage lending for the six months to March, well below the 10 percent limit.
The central bank introduced lending restrictions for people with small deposits in October to help keep a lid on house prices, particulary in Auckland and Christchurch.
Under the restrictions, no more than 10 percent of a bank's new mortgage lending can be loaned to people with less than a 20 percent deposit.
The bank's deputy governor, Grant Spencer, says the central bank's initial assessment is that the restrictions have helped reduce price inflation.
He says the bank will make a more in-depth assessment of the policy and its impact on the housing market in next month's Financial Stability Report.