NZ banks face headwinds

Standard and Poors has just released its latest report into New Zealand’s banking sector and it says the economic risks facing lenders have decreased.

That’s because the growth in average residential property prices across the country has continued to slow over the past two years, after a period of substantial growth in property prices and private debt.

House price inflation has moderated to about 3.0% in the 12 months to June 30, 2019, down from almost 15% in 2016 (and 9.9% a year over 2012-2016), the agency says.

But, in their view, the economic risks going forward are balanced.