Retirement village companies are being asked to give more detail on how well they are placed to cope with high debt levels in the event of a marked slowdown in the property market.
A report by broking house, First NZ Capital (FNZC), said the sector's dependence on banks has increased as companies expanded rapidly - buying more land and building more villages.
It said NZX-listed operators Ryman Healthcare and Summerset have been refusing to show for two years that they have adequately stress-tested their balance sheets in case of a property market downturn or demand for units.
"The absolute quantum of leverage in the sector has increased materially, and the ability of the sector to handle this leverage in a major downturn is, in our view, questionable," FNZC analyst and report author, Arie Dekker, said.
"The operators have not responded citing 'commercial sensitivity'. Certainly, more transparency is needed for the investors."
In a statement, Ryman said it approached debt conservatively and had weathered many housing market storms.
Despite market risks, it was pushing ahead with 16 village developments in the pipeline.
"We've increased our build rate and our aim is to double it, so it's logical that our debt has increased as our activity grows," the company said.
Summerset did not respond to requests for comment.
However the chief executive of the second biggest listed operator, Glen Sowry of Metlifecare, said it stress-tested its finances and its ability to pay down debt if the market soured.
The tests were shared with Metlife's board and its bankers, he said.
He acknowledged FNZC's concerns over transparency, however would not provide evidence of financial tests to RNZ.
A banker at ANZ involved in lending to the retirement village sector, Richard Hinchliffe, said it had been lending to the sector for 30 years and its borrowing to it was significant, which he would not detail for commercial reasons.
However, he said ANZ requested full information from retirement village operators before it lent, including details of their experience, and housing market and demographic data of the location of a village development.
"It's not like the information we would seek if we were just doing a simple commercial property lend, retirement villages are a lot of work," Mr Hinchliffe said.