Baylys Beach Development

Tougher NZ lending conditions

Tighter lending in Australia is already being blamed for the fall in house prices and a slow-down in the economy.

Curtayne said the focus on how consumers were able to service their debt had already flowed through to the New Zealand arms of the Australian banks in the second half of 2018.

“The question is whether the Auckland property market will follow Sydney and Melbourne downwards. That is the number one important factor for New Zealand.”

Shane Solly, a fund manager with Harbour Asset Management, said he also expected it to get tougher to borrow money in New Zealand.

“We expect access to bank debt is going to get more difficult.”

Solly pointed to banks in Australia cutting back on interest-only loans and said while they were not as prevalent in New Zealand, any cut-back could mean people suddenly could not borrow as much because they had to pay interest and principle off a mortgage.

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