The non-bank lending sector is expanding as property developers find it harder to secure loans from traditional banks.
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Property services firm JLL said traditional borrowing avenues were closing off as regulations instructing banks to hold more capital reduced the appetite to lend.
JLL New Zealand head of debt advisory Mark Farrands said that meant non-bank lenders were filling the gap.
He said most of the new lenders had loan-to-value ratios similar to that of traditional banks, however, they could expect higher interest rates.
"They're really just filling the void so it's lending at reasonable ratios at a higher level of return. So if you can't get the money from a bank and you go non-bank, it's more expensive.
"But over time as we see more non-banks start up here, we should see more competition and therefore the margins should squeeze down."
Farrands said many of the new non-bank lenders in the New Zealand market were Australian funds and he expected traditional bank lending to remain constrained for some time.
"Under the prevailing economic conditions, the major banks will continue to take a risk-off approach to lending. This will see them reserve capital only for their top tier customers, leaving a significant funding gap for projects earmarked for development."
Farrands said it was not a new phenomenon, as a growing non-bank lending sector would bring New Zealand in line with other nations.
"All over the world is a large non-bank sector which we just haven't had.
"Australia has gone through a similar change in their industry over there and we're just probably two to three years behind them in terms of the change we're seeing now."
