Deputy Reserve Bank Governor Grant Spencer said the LVRs, introduced on October 1, were aimed at moderating house price inflation by reducing the effective demand for housing.
''While they should help to reduce house price inflation, New Zealand house prices are likely to remain high on most metrics.
''In this sense it is hard to see how LVR restrictions will materially reduce the existing incentives to develop new residential property.''
The impact of LVR restrictions would not be uniform across the country.
Market segments with a higher proportion of high-LVR borrowers were likely to see larger effects, as would areas where house prices and borrower incomes exceeded the criteria for the exempt Welcome Home loans, he said.
The LVR restrictions were intended to reduce the build-up of systematic risk in the New Zealand financial system.
They would also potentially reduce the extent of interest rate increases and exchange rate pressure that might be needed in the coming cycle.
The LVR restrictions were also expected to reduce risk in banks' balance sheets, Mr Spencer said.
On Monday, the BNZ-REINZ residential market survey showed substantial falls across all measures, including the proportion of agents noticing more first-home buyers in the market.
A net 41% of agents said there were fewer new buyers around, the first negative for the series, down from a net 24% noticing more first-home buyers in September, and well down below the average of 31%.
BNZ senior economist Craig Ebert said houses sold fast in September, with the days to sell falling to 31, the lowest reading for a September since 2006.
However, it was important to note the results were ''lagged'' and almost certainly included a rush to beat the perceived October 1 deadline for the LVR policy regulation. October's housing data would be the first real test.
''One way or another, house prices will come to heel. It helps the Reserve Bank is now making it clear it won't be happy until this is achieved, having earlier seemed tolerant of house price inflation so long as it didn't spill over into CPI inflation.
"And it will do whatever's necessary to achieve the outcome.''
The BNZ was not against the macro-prudential framework - even implementation of the LVR restrictions, Mr Ebert said.
The bank felt the Reserve Bank had rushed the policies into play without being sufficiently clear about thresholds for intervention, what it was trying to achieve with the new tools and how it was all supposed to fit with orthodox monetary policy.
Mr Spencer said in his speech to the Property Council, in Auckland, the underlying issue in the New Zealand housing market was a shortage of supply.
In Christchurch, it was a result of the earthquakes. In Auckland, the shortage had been growing over a much longer period, with weak rates of housing construction since 2005.
House price inflation had accelerated only over the past two years, coinciding with low interest rates, easier bank credit and a growing trend among renters to become first-home buyers, he said.
The recent turnaround in inward migration was also adding to the excess of demand over supply.
Moves to increase the housing supply were well under way and residential building consents were moving upwards.
A more responsive supply side was the key and would require a responsible and innovative building sector and an adequate supply of labour, some of which would need to be imported. A responsive planning and consenting process was also needed, Mr Spencer said.
