(Updates to add detail, background)
WELLINGTON, Aug 12 (Reuters) - The Reserve Bank of New Zealand said on Friday it was delaying the start of proposed changes to property investment loan-to-value restrictions nationwide by a month to Oct. 1, in response to feedback from the banking sector.
The central bank proposed changes to existing mortgage lending rules to limit the risks to financial stability from the current boom in house prices.
"Banks have indicated through their submissions that more time is required to enable them to meet the new restrictions that apply to investor loans nationwide, given the pipeline of loan pre-approvals made prior to our announcement in July," Deputy Governor Grant Spencer said in a statement.
New Zealand house prices have increased by around 50 percent since 2010, driven by strong immigration, low mortgage interest rates and sluggish housing supply. The central bank has long signalled that this rise in house prices is a risk to financial stability.
The central bank put in place temporary restrictions on high loan-to-value ratio bank lending in October 2013 and tightened those restrictions for investors in the largest city of Auckland in November last year.
Under the proposed new restrictions no more than 5 percent of bank lending to residential property investors across New Zealand could be allocated to borrowers who had a deposit of less than 40 percent of the property's value.
Also, no more than 10 percent of lending to owner-occupiers across New Zealand could be extended to borrowers whose deposit was less than 20 percent of the property's value.
Spencer noted that the consultation process closed on Aug. 10 and the central bank was still analyzing submissions. He said further adjustments were possible.