Home mortgage lending is steadily increasing, but lending by the banks to the rest of the economy is on the decline.
Households, consumers and businesses borrowed a total $313.4 billion in August, down from $316 billion in April.
Lending on houses rose again in August and is now 13% higher than two years ago, near the height of the housing boom.
Consumers borrowed $7.2 billion in August compared to $7.4 billion in April, latest figures from the Reserve Bank show.
The increase in home mortgage lending at the expense of other sectors comes amid warnings of a housing-led recovery.
The Treasury and the Reserve Bank say the economy could slip back into recession if New Zealanders accumulate more debt to buy houses.
They say this would put upward pressure on the New Zealand dollar at the expense of exporters as banks increase borrowing from overseas to fund housing loans.
ASB chief economist Nick Tuffley says mortgage lending has steadily increased since the beginning of the year in line with the housing market recovery, but consumers are borrowing less as they pay down debt.
Mr Tuffley says businesses and the agricultural sector are continuing to borrow less.