Car loan enquiries increase

The demand for automotive loans was eight per cent higher in July than in the same month of the previous year, according to new figures from credit bureau Centrix.

Mortgage and personal loan enquiries also rose by 10.5 per cent and 4.8 per cent respectively, but overall consumer credit demand still declined by 7.3 per cent year on year.

Dragging the sector down were credit card enquiries tumbling by 15.8 per cent over the same period, retail energy demand falling by 20.7 per cent and buy now, pay later requests plunging 24.9 per cent.

Centrix says the figures indicate households remain cautious about taking on additional debt despite improving repayment trends and demand remains concentrated in larger, purpose-driven borrowing categories.

Its latest credit indicator report shows household lending made a strong start in 2026 but was down 4.5 per cent year-on-year in the June quarter.

“Approved new mortgage lending was down 5.6% compared with the same quarter last year, as property purchasers have become more cautious in response to rising interest rates,” the report says. 

As for vehicle loan arrears, these improved from 5.4 per cent to 5.2 per cent of active credit accounts in June.

Total consumer arrears among New Zealand borrowers also improved that month and fell to 10.65 per cent, the lowest level since 2021.

The number of people behind on payments declined to 420,000, down 12,000 from May this year. 

“The arrears rate is now 13.9 per cent lower than a year ago, indicating repayment pressure has eased for many borrowers,” notes Centrix. 

“Deeper financial pressure remains for a sizeable group, with 84,000 consumers still 90-plus days past due. 

“Renters continue to be disproportionately represented, accounting for approximately 70,000 of these cases.”

Monika Lacey, chief operating officer at Centrix, in noting the improvement for arrears is uneven, says business conditions also remain mixed. 

“Credit demand has softened and company closures and liquidations remain elevated, particularly across hospitality and retail trade,” she explains. 

“Construction still accounts for the largest number of liquidations, although its annual trend is beginning to ease. 

“At the same time, business defaults are declining and the average credit quality of new applicants has improved, suggesting active borrowers are generally performing more strongly. 

“Small business owners remain particularly exposed where personal and business finances overlap. Sole proprietors who own multiple businesses are experiencing nearly three times the mortgage stress recorded among non-business owners. 

“The improvement in arrears is encouraging, but elevated inflation, higher interest rates and winter costs leave the outlook finely balanced.”