Mr Twyford cited research suggesting that "one of the principal effects of LVRs has been to clean first-home buyers out of the market, essentially giving speculators a free hand".
Mr Wheeler said research showed an average of 19 per cent of house purchases over the last decade were by first-home buyers. That figure had fallen to 17 per cent only since the introduction of LVRs, albeit on a 13 per cent fall in volume of sales.
The RBNZ's report says that the fall in sales was more pronounced among first-home buyers, while sales to investors had remained largely constant, increasing the overall proportion of properties they were buying.
Mr Twyford cited research suggesting that 45 per cent of property sales in Auckland were now to investors.
Mr Wheeler acknowledged "the issue is also around people who invest and buy multiple houses".
"We have been thinking quite deeply about whether we need to introduce measures to discourage some of those practices", he said.
The RBNZ had consulted with financial markets, realtors and investors, "and we're currently exploring that in-house".
However, deputy governor and head of financial stability Grant Spencer said that work was part of the bank's overall assessment of risk weightings in the banking sector.
"So it's not a particular reaction to the particular volume of investors in the market right now."
Meanwhile, Mr Wheeler said the RBNZ wanted to see an easing in currently strong net inward migration numbers before it will begin phasing out the LVRs.
He said net inward migration had been consistently underestimated in forecasts and the bank was mindful that it may continue to be more of a factor than expected in the short term.
He said the restrictions had been successful with house price inflation nationally falling from just under 10 per cent to 4.9 per cent while in Auckland it had also halved from 17 per cent to 8.5 per cent thanks mainly to the combination of LVRs and interest rate increases.
''We ran the risk of a real bubble had we not introduced LVRs in October last year", he told Parliament's Finance and Expenditure Committee.
NZ First Leader Winston Peters later said Mr Wheeler had confirmed that "Auckland house prices will continue to soar while the Government allows wholesale immigration".
"The Bank is warning that with record migration flows there will be no stopping Auckland house prices going through the roof without Reserve Bank restraints.
"The Reserve Bank is leaving the loan to value ratios in place to try and hold down housing prices, disappointing many young Kiwis who want their first home but will struggle to find the required deposit under this scheme."
"When is the Government going to reduce immigration to the skilled workers we need and consider the detrimental impact on Kiwis wanting an affordable home?"
Mr Twyford pointed to Mr Wheeler's comments about the need to increase the supply of new homes to help curb rising prices.
"The Reserve Bank Governor has admitted he had to keep loan to value mortgage restrictions in place because the Government's attempts to increase housing has fallen 'a long way short'."
"The thousands of first-home buyers who are shut out of the housing market may have hoped for a lifeline from the Governor by easing LVR restrictions today. They will be bitterly disappointed but they should point the finger of blame at the Government, which has failed spectacularly to increase housing supply."
Read today's Financial Stability Report here:
