Consumer arrears are up 10 percent from a year earlier to a three-year-high, the latest Centrix data shows. Photo / Getty Images
More than 400,000 New Zealanders are behind on credit repayments as households struggle to deal with the tough economic climate.
Data from credit bureau Centrix shows consumer arrears hit 11.3 percent in December, up 10 percent from a year earlier to a three-year-high.
Vehicle arrears were at 5.3 percent, the highest level since June 2020.
New consumer loans increased by more than a quarter as people turned to credit to fund their lives, while mortgage lending fell 43 percent amid the cooling housing market.
Centrix managing director Keith McLaughlin said households tended to prioritise their repayments, with mortgages and car loans being the last to fall into arrears.
“There has been a trend from personal loans, credit cards, buy-now pay later, through now to auto-loans and finally into the home lending market.”
McLaughlin said the increase in vehicle arrears was concerning.
“A rise in vehicle arrears points to the challenges facing households, as this is usually one of the last credit repayments people let slip,” he said.
The rise in consumer loans was another sign of the tougher economic period, McLaughlin said.
“Some people have been less impacted than others, so they may take credit cards to go on overseas trips.
“The counter to that is you’ve got people who have essential spending, [they] need to meet those payments and personal loans are the only way they can [pay] that in the short term.”
Credit: Source link
For more News go to ovanewsblast.com