New Zealand Banks May Be At Risk Due to Housing Exposure

Auckland–New Zealand banks are highly exposed to the currently unstable housing market, which could cause problems, according to a report released Monday.Nearly half of all New Zealand bank assets are exposed to the housing market–an increase from roughly 40 percent five years ago just before the housing market took off, the New Zealand Herald said.By comparison, Australian banks have just 39 percent exposure.Although the situation is not considered as risky as the U.S. housing market was even a year ago, an analysis of bank disclosure statements by Auckland-based investors’ Web site showed New Zealand lenders could be hit hard if housing market prices were to drop around 30 percent and unemployment were to increase.