New Zealand's property market is entering a new phase as borrower priorities shift toward bare land, lifestyle locations and more complex lending structures. Campbell Smith, country head of Pepper Money New Zealand, outlines how these changes are reshaping adviser conversations and client needs. Pepper Money has updated its policies to reflect this shift, with bare-land funding to 60% LVR and lending limits of $1.6 million in selected high-value regions.
New Zealand borrowers are rethinking property ownership after years of affordability pressure and shifting market conditions. Campbell Smith, country head of Pepper Money New Zealand, says advisers are consistently reporting a broader range of client conversations than they were even a few years ago. 'The advisers we work with are telling us they're having a broader range of conversations with clients than they were a few years ago, from bare-land opportunities and lifestyle-focused investments through to lending structures that provide greater flexibility.' Borrowers are no longer focused solely on established homes in metropolitan markets. Regional opportunities, long-term planning and investment diversification are all part of the mix. That shift is creating real opportunities for advisers who are willing to explore those conversations with their clients.
Growing borrower interest in residentially zoned bare land prompted Pepper Money to update its lending settings. For some clients, securing land now allows them to plan for future development when the timing suits. For others, it is a strategic way to enter the market while keeping future building decisions open. Smith explains the thinking behind the change: 'As interest in these opportunities has grown, lenders have needed to consider whether traditional policy settings still align with how borrowers are approaching property ownership today.' Pepper Money now offers eligible borrowers funding up to 60% loan-to-value ratio (LVR) on residentially zoned bare land. Smith describes this as a practical response to a trend appearing more frequently through advisers and their clients across New Zealand.
These markets offer a combination of lifestyle appeal and long-term growth potential that draws a wide range of buyers. Smith notes that demand comes from owner-occupiers seeking a lifestyle change as well as investors attracted by strong underlying demand and limited supply. Changing work patterns and shifting ideas about where people want to live and invest are also influencing interest in these locations. 'For some borrowers, locations like Queenstown and Mount Maunganui offer a combination of lifestyle appeal and long-term-growth potential.' Strong demand has pushed property values higher across many of these areas. The breadth of borrower interest has widened significantly, with a greater range of profiles now actively pursuing property in these markets than was common just a few years ago.
Pepper Money recently raised lending limits in selected high-value regions from $1 million to $1.6 million. The change covers markets including Queenstown and Rodney District. Smith says the increase reflects a direct market reality: lending frameworks in some locations had failed to keep pace with actual property values. 'It's a practical response to a trend we're seeing more frequently through advisers and their clients.' Advisers were increasingly working with clients purchasing in markets where values regularly exceeded traditional thresholds. The higher limit removes a structural barrier that had prevented strong borrowers from accessing finance in these areas. For advisers, it means more capacity when structuring solutions for clients who are active in these higher-value locations across New Zealand.
Enquiries from Australian investors are rising across several of these markets. Some are looking to diversify geographically, while others are exploring opportunities in markets that offer a different dynamic to major Australian cities. Smith outlines what this cross-border interest means in practice: 'We're seeing that play out across the lending market. Advisers are working with a broader range of borrower scenarios, from investors looking to preserve capital to borrowers pursuing opportunities that may sit outside traditional lending pathways.' This adds another dimension to adviser conversations and client planning. Clients are not always following the same pathways they would have a few years ago. Access to flexible lending options is increasingly central to serving this broader and more varied mix of borrowers effectively.
Clients are seeking solutions that reflect their individual circumstances rather than a standard approach. Pepper Money has expanded funding availability at higher LVRs to give advisers more flexibility when structuring solutions. Smith describes the adviser relationship at the heart of this work: 'As country head of Pepper Money New Zealand, I'm spending a lot of time talking with advisers about what they're seeing on the ground. Every market is different.' Policy settings are only one part of the equation. Advisers are also looking for lenders that offer responsive service and genuine support when working through more complex scenarios. The ability to collaborate on practical outcomes becomes more important as borrower needs grow more diverse and the range of lending scenarios continues to expand.
The combined effect of Pepper Money's recent changes is greater choice for borrowers whose circumstances fall outside traditional lending settings. Bare-land funding to 60% LVR, limits of $1.6 million in selected high-value regions and expanded higher-LVR availability all widen the range of scenarios advisers can accommodate for their clients. Smith frames the direction clearly: 'Borrower needs are changing, and lending solutions need to evolve alongside them.' Strong borrowers should not be overlooked simply because their situation does not fit a standard mould. The common thread across all these changes is choice. Advisers are central to helping borrowers understand their options and move forward with confidence in a market that looks very different to that of a few years ago.
Campbell Smith: country head, Pepper Money New Zealand; Pepper Money is a non-bank lender operating across Australia and New Zealand for over 25 years; has supported more than half a million customers; works with advisers through a dedicated business development manager network.