Just weeks after asking property investors to have a 30 percent deposit to qualify for loans, ANZ has upped its requirements to 40 percent.
The bank says it's simply getting too hard for first-home buyers to compete.
"We've been closely monitoring the impact on residential property prices of historically low interest rates, reduced LVR requirements and existing issues with supply and demand," said managing director personal Ben Kelleher.
"Escalating property prices are putting home ownership out of reach for many Kiwis. The current settings favour property investors particularly over first-home buyers, potentially locking a generation of New Zealanders out of home ownership."
The number of households which own the property they live in has been falling since the early 1990s, hitting a 70-year-low at the time of the 2018 census, recently released figures show. The biggest drops in ownership have been for people in their 20s and 30s.
And this year has seen house price rises not just immune to the recession, but thriving - up nearly 20 percent in just 12 months, pushing the median price nationwide over $700,000 and in Auckland above $1 million.
"It's in everyone's interests for residential property prices to be sustainable long-term, and for home ownership to be accessible to as many people as possible," said Kelleher.
From March 1, the Reserve Bank plans to limit how much of bank's lending can go on properties with a loan-to-value (LVR) of 70 percent, eg. less than a 30 percent deposit. It's currently 80 percent.
ANZ wants the Reserve Bank to go further, and deem any investors borrowing with a deposit less than 40 percent to be considered high-LVR.
"As New Zealand’s largest home lender, decreasing the LVR on residential investor lending is one thing we can do to help bring balance to the residential property market."
At present, ANZ says it's lending nearly twice as much to investors than first-home buyers.
The Reserve Bank has been blamed by some for fuelling house prices this year - by allowing banks to borrow cheaply, but not restricting who they can lend it onto.
Other banks, like ASB and BNZ, have also moved to introduce LVR limits before the March 1 deadline, all currently requiring investors to have deposits of at least 30 percent.