The Bank's proposing to impose 30 percent LVR restrictions on residential property investors from October.

Green Party Co-Leader Russel Norman believes the measures will have some effect.

"Forty percent of demand in the Auckland housing market's coming from investors, so placing high deposit requirements on those investors should have some dampening effect.

"But I suspect we'll still see the Auckland housing market continue to bubble away."

Norman admits it's a funny country we live in, where foreign property investors will face less constraints in Auckland than their domestic counterparts.

"That shows you the incredible weakness of the central government in New Zealand, that the central government won't intervene to place some constraints on foreign buyers."

The new rules' regional effects

When it comes to mortgages in regional New Zealand, Labour's advocating for the market to dictate.

While the Reserve Bank has made it tougher for those who want to invest in housing in Auckland, the rules have been eased slightly for the regions.

Labour's housing spokesperson Phil Twyford believes LVRs should go completely from the regions.

"Of course it's unwise for people to take on mortgages with very low deposits that they might have trouble servicing, but in general the banks in New Zealand are pretty good."

Twyford argues the banks should be allowed to dictate how much of a deposit is needed within those regions - something that would've been easier had LVR restrictions been lifted.

"But I have to ask why they don't go the whole hog and exempt the regions from LVRs completely, when in places like Palmerston North or Gisborne or Dunedin, they don't have a housing crisis."

Meanwhile, the Property Institute contends the latest lending restrictions on houses in Auckland is not the silver bullet the Reserve Bank is expecting.

Chief executive Ashley Church maintains for investors who already own property, finding an extra 10 percent of equity is unlikely to be too much of an imposition.

"In terms of impacting on house price inflation in Auckland, I don't think it's going to make any difference whatsoever.

"While I understand why the Reserve Bank is doing this, this is not a measure that's likely to bring about the result they're looking for."

Another group agrees. Real Estate Institute CEO Colleen Milne admits while the move may cool the market down slightly, it might not be that significant.

She adds heightened prices are related purely to the supply issue.

Housing affordability part of a wider problem

FIRST Union is welcoming tougher lending rules for the Auckland housing market, but general secretary Robert Reid admits the only thing that can be done to make houses more affordable, is to ensure workers have more money to buy them.

"That does mean that a real and big lift to wages need to happen in this country."

As long as our wages are falling well behind other countries and falling well behind what is needed to keep up with the housing market, we will still find that workers cannot buy houses at all."

Beyond Auckland

Outside of Auckland it's a completely different story.

The Wellington Director of the Regional Economic Development Agency Paul Mersie told Newstalk ZB the Reserve Bank's relaxing of LVR restrictions outside Auckland is very positive.

"Having a policy that used to be nationwide to deal with an issue in a particular region was never very good."

Paul Mersie says the move means areas outside Auckland, will be less and less affected by the detrimental aspects of the policy.