The Reserve Bank's latest six-monthly assessment indicates the financial system is sound, but highlighted growing risks from the surge in house prices, particularly in Auckland, as well as from the dairy sector.
Reserve Bank governor Graeme Wheeler signalled further house lending restrictions, which he called 'macroprudential', was on the cards.
"We need to do more analysis, we need to have discussions with the finance minister, but I think it's fair to say that we're seriously looking at macroprudential."
He said he would not yet be taking further steps to rein in housing demand, but lending restrictions were on the cards.
He wants the government and Auckland Council to do more.
"So that's where a lot of the solution lies. It's trying to generate a greater supply side response.
"It's not simply this can be fixed with macroprudential policy. These imbalances are significant."
The government's Budget later this month, and a decision on Auckland Council's Unitary Plan in August, could help alleviate some of the supply side constraints, he said.
Labour's finance spokesperson Grant Robertson said Mr Wheeler's decision not to impose new measures now meant the ball was firmly in the government's hands to solve Auckland's housing shortage.
"The Reserve Bank feels it's done its share of the work in the housing crisis. The government now has to step up and it's failed to do that over the last few years and I actually can't see that changing over the short term."
ASB Bank chief economist Nick Tuffley said the Reserve Bank seemed to think the risks were manageable and banks were strong enough to absorb any shocks.
However, he expected lending restrictions would cool the Auckland housing market and said the Reserve Bank was likely to push out any further interest rate cuts to avoid fuelling higher house prices.