New Zealand Lenders Sentiment Survey Q3 2022

The survey highlights the following key messages:

• More than twice as many lenders want to grow their loan book as those wanting to shrink but appetite is lower for construction compared to investment lending.
• Lenders are most overweight in build to sell residential and most underweight in industrial.
• Industrial is the most preferred sector for both construction and investment lending.  This is true for even non bank lenders that typically focus on the residential sector.
• However, non bank lenders continue to seek exposure to residential construction loans with terrace houses and land subdivision being the preferred form over apartments.
• Influenced by higher risk margins and lower liquidity for some lenders, the cost of debt is expected to increase with three quarters of lenders indicating moving to higher margins.