(Bloomberg) -- New Zealand’s central bank said it intends to further restrict access to mortgages as house prices continue to soar.

The Reserve Bank plans to reduce the amount of low-deposit lending banks can make from Oct. 1, and will also consider introducing debt-to-income limits and/or interest-rate floors later this year, Deputy Governor Geoff Bascand said in a statement Tuesday in Wellington. A previous tightening of restrictions hadn’t seen a sufficient reduction in risky lending and, if house prices were to fall, some buyers could face the possibility of negative equity, he said.

New Zealand policy makers are battling one of the hottest property markets in the world, with prices surging 30% in the year through June. The government has already changed tax rules for property investors in an effort to damp demand and, with the economy showing signs of overheating, the RBNZ has signaled it may start raising interest rates as soon as next month.

The central bank proposes to restrict the amount of lending banks can make to house purchasers who have less than a 20% deposit to 10% of all new loans, down from 20% at present. It also intends to consult in October on implementing debt-to-income (DTI) restrictions and/or interest-rate floors.

“Introducing DTIs will take longer, whereas the banking industry has informed us that interest-rate floors could be implemented more quickly,” Bascand said. “Consultation will be focused on operational feasibility and possible calibration of these tools, including their impacts on investors and first home buyers.”

Separately, Finance Minister Grant Robertson said Tuesday that he and RBNZ Governor Adrian Orr have updated their Memorandum of Understanding on macro-prudential policy to support the government’s housing objectives.

The MoU now states that in the design and implementation of a debt serviceability restriction, the RBNZ “will need to have regard to avoiding negative impacts, as much as possible, on first home buyers,” Robertson said.

“I believe this agreed wording will set clear public expectations while maintaining the operational independence of the Reserve Bank,” he said. “It is still up to the Reserve Bank how it chooses to introduce any restrictions, having had regard to this condition.”

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