The New Zealand government is under increasing pressure to control foreign speculators who are buying investment properties in Auckland.
The lending restrictions announced by the Reserve Bank of New Zealand on Wednesday don't touch non-resident buyers and could be to their advantage.
The bank's governor, Graeme Wheeler, has acknowledged that forcing local investors to pay a 30 per cent mortgage deposit will decrease competition and others could move into the gap.
He says it would be "very helpful" to have data on how many foreign buyers are in the Auckland market, but the government still doesn't think that's necessary.
The Green Party says ministers are in denial.
"Foreign buyers are treating the Auckland housing market like a restaurant buffet - they're going back for second, third and fourth helpings," said housing spokesman Kevin Hague.
"Every house a non-resident speculator snaps up is a home an Aucklander can't own."
The Reserve Bank has estimated investors accounted for about 40 per cent of Auckland house sales last year - but it doesn't know how many of them were non-residents.
"The government's refusal to even monitor how many homes are owned by foreign speculators, let alone stop them from doing so, shows just how clueless they are when it comes to trying to fix the Auckland housing crisis," Mr Hague said.
Labour's Grant Robertson says the new lending restrictions will give foreign buyers a free hand.
"This will be an unintended consequence, and shows the ludicrous situation where a central bank wants to tackle a major issue that the government is ignoring," he said.
"The government must fix this looming loophole."
An investors' group says the Reserve Bank's attempt to cool the over-heated Auckland property market is unlikely to reduce house prices.
The move is in response to rampant house price inflation in the country's largest city with the median price for a home rising by 60 per cent since 2008.
But the head of the Property Investors' Federation, Andrew King, believes the bank's focus on investors is misplaced.
"Rental property buyers are not a prime influence on current house price levels and the new regulations are unlikely to make a large impact on future house price increases," he said.
"The real effect is that many rental property owners will not have sufficient capital to afford this and rental property supply will fall at a time when more is needed."
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