After saying LVRs would remain for the time being, he acknowledged competition from investors was a factor in a drop-off in the number of first-home buyers in the market since the restrictions were introduced.
Since the LVRS were introduced a year ago, overall house sales are down 13 per cent across the country but the proportion of those sales going to first home buyers had dropped from just under 20 per cent to little more than 17 per cent according to data from CoreLogic.
Overall, that translates into a 26 per cent drop in sales to first-home buyers.
On the other hand, sales to investors have risen as a proportion of the overall total from 37 per cent to 40 per cent.
In terms of investor activity in the market, Mr Wheeler said, "We have been thinking quite deeply about whether we need to introduce measures in fact to discourage some of those practices."
Details are still being finalised but the RBNZ wants banks to identify customers who are big property investors, possibly by assessing how much of their wealth comes from property.
The RBNZ would then require banks to hold larger capital reserves to cover any potential future losses on those loans.
However, holding larger reserves costs the banks more money and they will likely seek to recover those costs by imposing higher interest rates on loans to investors caught by the new regime.
The major banks were this week unwilling to offer comment on what rates might apply to loans caught by the proposed regime.
Bankers Association chief executive Kirk Hope said commercial property interest rates were likely to apply. TSB Bank currently offers fixed term commercial property loan rates ranging from 8.1 per cent fixed for one year to 9.8 per cent fixed for three years, which are 2.4 percentage points and 3.6 percentage points higher, respectively, than residential rates.
A 3.6 percentage point hike would add $54,000 to the interest bill on $1.5 million worth of loans. But the RBNZ is having difficulty deciding how banks should classify loans so that they come under the regime and has delayed its introduction twice.
It was initially working on a model that would capture investors who owned four or five investment properties.
Deputy-Governor and head of financial stability Grant Spencer last week said the bank was now not sure that was appropriate and it was now looking at an income based measure.
"That may be on the basis of the proportion of their total income that's coming from their investment portfolio" he told Parliament's Finance and Expenditure Committee.
Whichever model the bank opted for, Mr Hope said it would be extremely difficult for the RBNZ to develop a robust mechanism which investors would not find ways of dodging.
Nevertheless, he believed it would capture "a reasonable proportion" of property investors throughout the country. "So that's going to wash through the economy."
One effect could be rent hikes as landlords seek to recover the higher cost of borrowing from tenants. "That's obviously something the Reserve Bank need to think about," Mr Hope said.
Social housing providers also have some concerns with Community Housing Aotearoa warning its members this year that the new rules may require banks to reclassify their borrowing.
Labour's housing spokesman Phil Twyford said his party welcomed the plan for its potential to curb house purchases by investors.
"For the Reserve Bank to look at levelling the playing field between first home buyers and speculators would be a good thing."
David Whitburn, Auckland Property Investors Association immediate past-president, was somewhat philosophical about the plan.
"Some form of regulation adverse to property investors is imminent."
However, in terms of helping first-home buyers he believed other measures would be more effective.
"Why don't we change the RMA, reduce costs, time and uncertainty in achieving resource consents, train and open migration doors even wider for those with skillset in the construction sector, and make changes to make longer-term tenancies with more control more palatable?"
Craig Herbison, BNZ director of retail banking and marketing suggested that instead of singling out landlords New Zealand should instead consider how to make other forms of investment as attractive - if not more so - than property.
"We need a national conversation around tax incentives for savings and investments in the capital markets, and potentially disincentives for residential property," he said.
Though Mr Wheeler pitched the RBNZ's plan as something that could act as a disincentive to property investors, his deputy and head of financial stability Grant Spencer made it clear that was not the bank's concern. The plan was "not a reaction to a particular volume of investors in the market right now" but part of the RBNZ's "overall assessment of risk weightings in the prudential regime".
In other words, the RBNZ is considering the new rules as part of its work to ensure banks were in good shape to weather any potential financial or economic storms that could affect borrowers' ability to repay their loans.
"The Reserve Bank has no view on how many properties an individual should own, nor borrow against," it said on its website this week. "Our interest is that banks are adequately capitalised for the risks they face."
The bank expects to gather information about how many investors would be affected when it consults further on the plan early next year.
Gambling on Vegas pays off for Kiwi landlord
Tim Duffett (pictured above) is pondering the Reserve Bank's crackdown on big property investors in his new territory - Las Vegas.
The Kiwi landlord reckons one of the world's gambling capitals beats Auckland hands down when it comes to good prices and even better rental returns from a good stable tenant market.
So he has been diversifying geographically, moving out of Auckland and going stateside to Nevada for the past few years.
When it comes to landlords, the North Shore resident is somewhat of a high-roller, but a cautious one.
He bought into the casino hub where he says a plentiful supply of houses and high demand from tenants makes for a magic formula.
He is keeping a close eye on what's going on here, after Reserve Bank Governor Graeme Wheeler warned of "further measures" to discourage multiple landlords.
"I have nine rental properties in Las Vegas. In Auckland, I've lost a couple because of the City Rail Link, but it's 16 or 18, I can't remember," says the long-term professional investor.
Duffett thinks any attempt to crack down on landlords with high loan-to-value ratios or deriving a certain portion of their income from rental properties might well not capture him.
Despite the size and geographic diversity of his multimillion-dollar portfolio, his borrowings are relatively low compared to the value of his properties.
Duffett says he has about a half share of the equity in his places so only 50 per cent of their value is borrowed money.
Not only that, be he earns more from his consultancy business, Plan A, than from those 25 or 27 residences here and in the United States.
His Auckland places are on the city fringe and around Papatoetoe and Manurewa. Around 2011, he increased his portfolio by four rental units in Auckland and seven in Las Vegas, which he regarded as better than New Zealand due to low prices and high rents. But right now, he's neither buying nor selling. "I'm sitting on my hands."Anne Gibson
