PHOTO: Bank lending is expected to tighten over the next six months. Photo credit: Getty.
Property developments are going to struggle to get off the ground as bank lending tightens over the next six months.
The Reserve Bank has conducted a special, out of cycle, credit conditions survey to understand how lending practices have changed since lockdown.
It’s found the availability of commercial property loans was already constrained before the lockdown, but had since fallen to a net -38.4 percent from -10.4 percent.
Banks said they were cautious about lending due to the uncertainty surrounding depth and duration of the downturn, which has affected market confidence and pre-sales in residential property.
Infometrics senior economist Brad Olsen said the outlook isn’t likely to improve.
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