New clamp-downs on residential property investors appear to be working.
Figures from the Reserve Bank show the amount investors borrowed to buy property dropped $287 million between September and October to hit $1.453 billion - the lowest it has been since January.
New nationwide rules came into force from October 1 requiring most investors to have a minimum deposit of 40 per cent to get a mortgage.
Before the change most investors in Auckland were required to have a 30 per cent deposit while outside of Auckland owner-occupiers and investors were treated the same with most borrowers needing a 20 per cent deposit.
The change was designed to curb property investors in the regions where house prices have taken off in recent months.
The Reserve Bank has been concerned about financial stability with the amount borrowed by property investors rising rapidly.
Investor borrowing hit a peak of $2.698b in May before the Reserve Bank announced consultation on its nationwide investor restrictions in July.
At the time Reserve Bank governor Graeme Wheeler said the banking system was heavily exposed to the property market with residential mortgages making up 55 per cent of banking system assets.
"Investor lending has been increasing rapidly and is a significant contributing factor to the current market strength. The proposed restrictions recognise the higher risks associated with such lending," he said.
The changes were due to come into force in August but were pushed back to October 1 at the request of the banks.
The figures also show first home buyer borrowing rose between September and October from $718m to $768m.
In total $5.369b was borrowed to buy property in October.
October property lending
First home buyer $768m
Other owner/occupier $3,092m
Business purposes $56m