The language was polite, but the message was clear.
The Reserve Bank thinks the Government could do more to take the heat off the property market.
The tax system and migration are two areas that Deputy Governor Grant Spencer says the Government needs to address.
In a speech to the New Zealand Institute of Valuers, he warned of the dangers a severe correction in the housing market could pose to the financial system and the broader economy.
He said the Reserve Bank is working on new policies to reduce demand but also said the Reserve Bank can't do anything about supply.
That is where the Government comes in.
The supply of land, costly planning and consent processes and inefficiencies in the building industry are all factors that are being addressed or need to be.
But Mr Spencer also singled out taxes and migration as two areas that need to be looked at.
“The housing market imbalance has been exacerbated by New Zealanders' on-going preference for investment in bricks and mortar over financial investments, due in part to the ready availability of credit and a tax system that favours debt funded capital gains," said Mr Spencer.
He said the changes introduced last year to the taxing of property investors have had an effect on curbing short-term speculation.
But, he added "consideration might be given to further reducing the tax advantage of investing in residential housing."
The Reserve Bank knows this is a complex and controversial issue.
So too is migration.
It is good for economic growth but Mr Spencer said the net inflow of 160,000 permanent and long-term migrants in three years was putting pressure on the housing market.
"There may be merit in reviewing whether migration policy is securing the number and composition of skills intended."
He said any changes would "operate at the margin" but over time could help to moderate house prices.
Tougher deposit requirements
Mr Spencer did not unveil any policy changes, but said the RBNZ is looking at tougher mortgage requirements by the end of the year.
The Bank may lift the thirty percent deposit requirement that is already in place for Auckland investors. Or it might widen it across New Zealand, at least to some regions.
New debt-to-income rules could be introduced as well. But first the RBNZ and the Government would need to rewrite their Memorandum of Understanding to give the Bank the tools to implement the policy.
The RBNZ is also looking at requiring the commercial banks to hold more money on their books against the money they lend to property buyers.
The Property Institute has questioned the wisdom of signalling its intention to the market.
Chief Executive Ashley Church says this will now lead to "a huge flurry of last minute buying which will push prices up as Property Investors rush to beat the end-of-year deadline."
His concerns are shared by BNZ Chief Economist Tony Alexander who believes the speech will prompt a rush of buyers.
The Reserve Bank is fully aware of the dangers of unintended consequences.
That is part of the reason it has not rushed to introduce the new policies.
It will also be aware of the risk that the speech could prompt an increase in speculative property buying.
Perhaps this will prompt the RBNZ to resist cutting the Official Cash rate next month?
The currency markets appear to think so. Some traders bought the New Zealand dollar because they think a rate cut is less likely.
The New Zealand dollar had risen to 72.24 US cents by 9am, compared to 71.30 on Thursday morning.
The kiwi was trading at 96.63 Australian cents, compared to 94.89 yesterday morning.
The rise in value against the Australian currency was also driven by Standard & Poor's decision yesterday to downgrade Australia's rating outlook to negative from stable.