Bascand said regional restrictions would not only be impractical but would not fix the problem.
"The housing problem is not just about Auckland. There are rising house prices in Christchurch and the Waikato.
"Also, if someone bought a house in Whangarei but borrowed from a Hamilton bank, from a practicality point, that [restrictions] would be difficult to introduce."
Bascand said also that China's housing market had slowed, which could effect the region's forestry hopes and lumber export market.
"They [China] have high urban vacancy rates and building in China is likely to moderate."
Meanwhile, population continues to grow in Auckland and the Super City is trying to build its way out of its housing crisis, meaning opportunities for Northland tradies and suppliers, he said.
Bascand had flown into Onerahi on Thursday morning with Prime Minster John Key. While no words were exchanged between the men, Bascand was aware that Key was off to fight National's byelection corner.
A byelection doesn't shake economic confidence like general elections, Bascand explained, before we veered off politics and jumped back into the issue of housing.
Lending
The Reserve Bank has started a consultation process with banks and the property sector on a new asset class treatment for mortgage loans to residential property investors.
Default rates and loss rates experienced during sharp housing market downturns tend to be higher for residential property investment loans than for loans to owner-occupiers.
The change would allow banks to hold appropriate regulatory capital on this lending and would group loans with similar risk profiles.
The consultation is focusing on the definition of a property investment loan and gives three options.
"We are asking questions like is the mortgage property owner-occupied, or is the servicing of the mortgage loan primarily reliant on rental income or thirdly, not at all reliant on rental income," said Bascand.
Consultation closes on April 17 and as soon as the Reserve Bank has settled on a definition, it will require all locally incorporated banks to include residential property investment mortgage loans in the specific asset sub-class.
Bascand said this change came about as the commercial property market was distinguished by a higher default correlation across commercial property loans. The risk from investor properties, he said, could be fixed by applying the same loan risk analysis to property investors as existing commercial loans.
Before joining the Reserve Bank in 2013, Bascand was the Government Statistician and Chief Executive of Statistics New Zealand as well as being a senior economist at the International Monetary Fund.
The Reserve Bank has resisted engaging in riskier investments, such as investing in equities or gold, as some central banks do, despite the potential for higher returns.
It generated a net profit of $56 million in the 2014 financial year, down from $308 million a year earlier, generating earnings from domestic market and foreign reserves management. These primarily assist it in fulfilling its duty as monetary authority and prudential supervisor.
The Reserve Bank's core function is to promote a sound and efficient financial system by monitoring the macro economic picture and the microecomomics of individual markets.
