Real estate agents and lenders are calling for home lending restrictions to be removed, saying they have done their job.
The latest figures show house sales fell for the 11th successive month in September, while prices continued to cool.
The Reserve Bank introduced the loan to value ratio (LVR) restrictions, which limited low deposit lending to no more than 10 percent of new mortgages, in October last year.
Real Estate Institute chief executive Helen O'Sullivan said the restrictions had played a part in falling sales and the trend for sales volumes to decline compared to last year has continued.
"That's of significant concern, I guess, because we've seen that trend since the introduction of the LVR restrictions and, of course, the four interest rate rises that have occured since then.
"Volumes are now at their 2012 levels, which were really only a modest recovery on where they'd been in previous times.
"We're still a long way from the kind of volumes we saw in '07 and '03-'04, so a really interesting trend in the market."
Reserve Bank Governor Graeme Wheeler. Photo: RNZ / Diego Opatowski
The Reserve Bank indicated in May the limits would remain in place until at least late this year.
But Harcourt's chief executive Hayden Duncan wanted them to go immediately.
"Absolutely, they should be gone overnight."
The LVR restrictions had slowed double-digit price growth in Auckland and Christchurch, demand remained unsatisfied and they had crucified other provinces, Mr Duncan said.
"We haven't got a property bubble in New Zealand. We've got a couple of markets that are certain very, very strong but they could be more creative or look at maybe a solution that is isolated to the market they'd like to control."
Call to ease restrictions
Banker's Association chief executive Kirk Hope said easing the restrictions would not be the end of the world and suggested loosening them from 10 percent to perhaps 15 percent might help flagging economic growth.
"One of the things I think the LVR restrictions and OCR (official cash rate) increases did is they've put almost a double break on the economy, if you like," he said.
"So easing those restrictions just helps to bring perhaps a little bit more flow back into the market."
But Westpac chief economist Dominick Stephens did not expect the Reserve Bank to relax its stance this year.
He said rising immigration and falling fixed mortgage rates, coupled with a lack of new houses in Auckland, could re-ignite the market.
"It's just a little bit too early for the Reserve Bank to actually pull the trigger just yet.
"I'm not completely convinced that the housing market is set to slow further. If you like, the beast has not been completely slain."
Mr Stephens picked LVRs would be gradually removed from about the middle of next year.
LVRs temporary
The Reserve Bank has been at pains to point out the that the restrictions will be temporary, despite evidence overseas showing that LVRs become a permanent mixture of a central bank's tool box.
First-home buyers had borne the brunt of the restrictions - something which would have a profound effect on a country where owning a home mattered, Massey University centre for financial services and markets director David Tripe said.
"We can cope with the adverse social consequences of the LVR restrictions in terms of the impact on first-home buyers for a period of time," he said.
"But if this was to be kept in place for a longer period, then it would become much more challenging and much more of an issue."
The Government has moved make sure it is seen as taking this issue seriously, with changes to the Resource Management Act to speed up house building and a shift in social housing from the state to private providers.
