The Reserve Bank expects house prices will rise at a slower pace in coming years as increased construction helps ease supply constraints, and measures to curb property investors take some of the heat out of the Auckland property market.

The bank anticipates measures to impose lending restrictions on property investment loans and more rigorous taxation of speculative investment will suppress house price inflation in the first year of their implementation.

It also expects the recent appreciation in house prices will have encouraged construction to help fill in the supply gap.

Governor Graeme Wheeler cited Auckland's housing market as the biggest risk to the financial system last month, as cheap money, high net migration and a shortfall of supply created tight competition and drove up prices.

"House prices in Auckland continue to increase rapidly, and increased supply is needed to address this," Mr Wheeler said at Thursday's monetary policy statement.

He said tighter loan-to-value measures for the Auckland market and government tax initiatives to target speculators, planned for October 1 should ease the impact of investor activity.

The property market has been a thorn in the side of Mr Wheeler with him juggling the competing tensions of trying to bring down a strong currency, while refraining from cutting interest rates too low for fear of pouring fuel on to the Auckland housing market.

Borrowers were moving away from floating rate mortgages, with about 26 per cent on variable rates in April, the bank said. One-year and two-year fixed rates were still the most popular among borrowers.