Economists expect the Reserve Bank to make it first step towards loosening bank lending restrictions on Wednesday as part of its Financial Stability Report.

Jeremy Couchman, a senior economist at Kiwibank, said there was anticipation in the financial markets that the central bank would make an announcement around loan to value ratios following comments made by Reserve Bank governor Grant Spencer earlier this month.

Loan to value ratios or LVRs restrict how much the banks can lend to low deposit borrowers.

They were first introduced in October 2013 and were tightened in 2015 and 2016 in a bid to cool the raging property market.

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But now the market has slowed down there have been calls to lift the restrictions which require most residential borrowers to have a 20 per cent deposit.

Couchman said the bank was expected to stop short of announcing any loosening of the current policy but outline the conditions necessary to justify loosening it.

Couchman said he believed the central bank would want to see the property market stabilise before making any changes to loan restrictions.

"At the moment what is hitting the housing market has been the uncertainty from the election. That has added a bit of volatility.

"I think the Reserve Bank will want to see that settle down."

He predicted that could take until the end of Summer with the property market typically having a good run over the warmer months.

But he said any unwinding of the restrictions were likely to be gradual and predicted they could start with residential lending, leaving the restrictions around property investors in place.

At the moment the banks are not allowed to lend out more than 10 per cent of their mortgage book for residential loans with a deposit of less than 20 per cent.

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Couchman said it could ease off the brake by lifting the speed limit to 15 per cent.

That could happen as early as April or May, although it would likely take into account consultation with the banks, he added.

In its weekly economics note ASB said Spencer's comments suggested once the new government's housing policies were in place it would likely begin to relax the loan to value ratio restrictions.

"The FSR [Financial Stability Report] covers a range of issues, but we expect housing market risks to financial stability and the macro-prudential toolkit will be under the most external scrutiny at this release.

"Grant Spencer, Acting Governor, signalled the RBNZ will lay out the process at this upcoming FSR of how it will unwind loan to value (LVR) lending restrictions as housing risks recede."

The ASB economists noted the Reserve Bank was also likely to reiterate its desire to have debt-to-income restrictions included in its toolkit although the central bank has said it would not use them right now even if it did have them.