New figures come after RBNZ cut
Following the Reserve Bank’s recent 25 basis point rate cut, mortgage delinquencies showed slight improvement in July, with 21,000 home loans reported as past due, down by 500 from the previous month, Centrix reported.
However, mortgage demand remains subdued, with application enquiries down 1.5% year-on-year.
Consumer arrears ease amid improved sentiment
Consumer arrears fell to 456,000 in July, reflecting a positive shift in sentiment as interest rates and inflation pressures ease.
“Arrears continue to ease as consumer sentiment improves with lower interest rates,” said Keith McLaughlin (pictured above), managing director at Kiwibank.
Financial hardship cases continue to rise
Despite some improvements, financial hardship cases increased to 13,850 in July, up 27% year-on-year, with nearly half of these related to mortgage payment difficulties.
“It’s vital for those struggling to seek advice early to avoid bad debt emergencies,” McLaughlin said.
Business liquidations and defaults climb
Business credit data revealed a rise in defaults and company liquidations across New Zealand, particularly in Auckland, which saw a 33% increase in Q2.
The manufacturing sector has been notably impacted, with liquidations up 15% over the past year.
Outlook remains challenging despite rate cuts
While RBNZ’s rate cuts have provided some relief, the broader economic environment remains tough.
“Challenges will likely persist for both New Zealand consumers and businesses,” McLaughlin said, urging cautious financial planning for the coming year.
Compare the latest Centrix figures with the previous report.
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