Housing credit continued to grow strongly as annual growth hit 9% in July.
The Reserve Bank credit data showed the pace of housing credit had slowed in the past few months and ASB senior economist Jane Turner predicted the growth might be past its peak.
Lending in July grew more than $1.6billion but was down from May’s stellar $2.1billion increase and June’s strong $1.9billion.
The new investor loan-to-value restrictions, due to be implemented on October 1, were already being observed by banks and, so far, evidence pointed to a quietening in mortgage lending.
Reserve Bank mortgage approvals in August fell and the share of investor lending in July also dipped, she said.
Given the additional LVR restrictions, the Reserve Bank was expected to be more willing to cut the OCR to 1.75% in November in response to the "stubbornly high" New Zealand dollar and weak inflation outlook.
The 9% rise in July was only about half of that seen at the peak of the previous cycle, Ms Turner said.
For the first time in eight months, investors did not gain a higher share of all new lending.
Nationwide, investor lending eased back slightly to 37% from 38% and fell 2% in Auckland to 46% of all new loans.
"We would expect to see the share of new lending to investors to continue to ease over the coming months as the new restrictions limit the amount investors can borrow."
Business credit growth took a step back in July as annual lending growth dipped to 6.6%, she said.
Despite the slowing in growth, the level of business credit growth was in line with the average pace of growth in the past year.
Continuing its recent trend, annual agricultural credit growth continued to slow in July.
The ASB expected further gradual slowing but ongoing credit demand to cover dairy farmer cash shortfalls would support credit growth to a degree, Ms Turner said.
