Southern Cross enjoys strong year

The company’s total value of loans under arrangement  grew 24.8% in the year to date, as growth in investor funds rose 19.9%.

The volumes indicate more Kiwis are willing to invest in P2P lending, and more customers are turning to the product, despite their typically higher interest rates.

Jackson predicts non-bank lenders will finance building growth in Auckland as banks tighten up. He 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.”

He believes non-bank lenders can help address Auckland's housing shortage: “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.”

The P2P specialist’s growth comes as non-bank lenders including Bluestone, and RESIMAC note an uptick in business, as customers are turned away by New Zealand’s bigger lenders. Scrutiny from the Australian Royal Commission and the Responsible Lending Code have “entrenched the banks’ reluctance” to lend, Jackson said.

Southern Cross became one of the country’s first residential P2P lenders in December 2016. Prior to the P2P launch the company was a contributory mortgage broker.