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Non-bank lenders increasingly fuelling Auckland housing

10 September 2018 Non-bank lenders increasingly fuelling Auckland’s residential building growth

Increasingly Auckland’s housing needs are being funded by non-bank lenders which have largely stepped into the breach vacated by the traditional banks, which in turn is attracting greater investor interest in the peer-to-peer lending space.

CEO of New Zealand’s largest peer-to-peer mortgage lender Southern Cross Partners, Luke Jackson, believes that if it wasn’t for non-bank lenders helping to fund the city’s building programme, the sector would be going nowhere fast.

“Southern Cross Partners – which lends against secured property – is growing 20 per cent year-on-year as the banks retreat from funding housing, and sector demand grows,” Jackson said.

“The banks run auto decisioning for their property lending, so if you don't tick all the boxes you don’t even get off the starting block. The non-bank lenders like ourselves are still ‘human’ centric in our decision making.”

Jackson’s view is that the Responsible Lending Code in New Zealand has made local banks more risk adverse, and The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Australia has entrenched the banks’ reluctance to lend.

Australian banking regulations put limits on parent bank lending to New Zealand banks, which has made it harder and more expensive for our local banks to get the cash they need for local lending.

Short term, peer-to-peer lending in New Zealand, however, relies on local investors for cash supplies.

“Southern Cross Partners, as one example, matches investors with borrowers and all lending is secured against property. We’re finding this has a lot of appeal for local investors.

“It’s more important now that we get the investment because without an adequate money supply, growth and development slows down. In a city that needs 13,000 houses a year to keep up – but only 7,000 are being built annually – lack of funding will only make the housing crisis worse.”

Since receiving its peer-to-peer lending license from the Financial Markets Authority (FMA) in November 2016, the Southern Cross Partners platform has facilitated more than $170 million in secured loans from investors to home borrowers and property developers.

“The reasons investors come to us are the same as they always have – to secure a good return on investment.

“What has surprised me though is the sentiment expressed by some that this is their chance to make a difference by helping more Kiwis into homes of their own. With our current loans, arrears are minimal and defaults non-existent,” Jackson said.

For more information about P2P investing (including the risks) visit or contact your investment advisor Ends/… ABOUT Southern Cross Partners specialises in short term property finance and first mortgage investments and prides itself as an alternative financial solution. The Group includes the following companies, that are covered by the terms and conditions contained within in this site: Southern Cross Partners Limited SCFL Nominees Limited Southern Cross Partners provides its investors with a competitive rate of return. A professional team of people source suitable loan investments for investors, supported by registered mortgages over property.

All aspects of the loan and investment are managed on an investor’s behalf by Southern Cross Partners Ltd from inception to maturity.


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