Ratings agency Standard and Poor's says the resurgent housing market is one reason it has a negative outlook on New Zealand owned banks.
A negative outlook implies a one-in-three chance a bank's credit rating will be lowered.
Given the role speculative activity has played in a number of poorly performing housing markets around the globe, Standard and Poor's financial institutions ratings senior director Gavin Gunning said a sharp rise in house prices is a warning signal.
He said in New Zealand, at least in Auckland and Christchurch, there seems to be some supply and demand or economic factors underpinning the price increases.
Mr Gunning said it obviously relates to the rebuilding of Christchurch after the earthquakes and in Auckland there appear to be issues of under-supply.
He said fact that the price increases seem to be associated with real economic factors rather than speculative activity gives Standard and Poor's some degree of comfort, as does the behaviour of New Zealand banks.
Mr Gunning said residential mortgage lending policies and practices in the major bank sector lending appear to be sound, but Standard and Poor's still sees house price increases as a key sensitivity while understanding some of the trends that are driving it.
He said the ratings agency regards the Reserve Bank's proposed macro prudential tools, such as restrictions on providing mortgages to people with low deposits, as a positive development.
On Thursday, Reserve Bank deputy governor Grant Spencer acknowledged that using such tools to cool the housing market may make it harder to get mortgages for a while. However, he said they should help to make houses more affordable in the longer term.