Demand for car loans up 8.8%
The demand for automotive loans was 8.8 per cent higher in June than in the same month of the previous year, according to new figures from credit bureau Centrix.
Its latest credit indicator report shows overall loan inquiries fell 5.3 per cent year-on-year, indicating households remain cautious about taking on new credit, but demand remains strong for larger, purpose-driven borrowing categories.
Centrix notes mortgage inquiries were also up 12.5 per cent year-on-year, suggesting borrowers are still active where credit is linked to housing or vehicle purchases.
Personal loan demand was also up by 3.5 per cent, but other categories were subdued as inquiries for credit cards and buy now, pay later fell by 14.3 per cent and 18.7 per cent respectively.
The report also shows vehicle loan arrears held steady at 5.3 per cent of credit accounts in May, compared with 5.5 per cent a year earlier.
Total consumer arrears among New Zealand borrowers fell to 10.95 per cent of the credit active population, the lowest level in four years.
This meant the number of people behind on payments declined to 432,000, down 11,000 from April this year.
Monika Lacey, Centrix’s chief operating officer, says the latest figures suggest many borrowers are in a stronger position than they were a year ago, helped by lower mortgage rates and a gradual easing in repayment pressure.
“However, this improvement is not uniform. While fewer consumers are behind on repayments overall, 89,000 people remain 90 or more days past due, showing more serious financial pressure is still affecting some households,” adds Lacey, pictured.
“Credit demand has also weakened, indicating households are still cautious about taking on new debt despite improving repayment trends.
“Larger, purpose-driven borrowing such as home loans and vehicle finance remains more resilient, while demand for credit cards, buy now, pay later and retail energy credit has softened.
“Overall, June’s data suggests credit conditions are improving for many households and businesses, but confidence remains measured and pockets of financial strain are still evident.”
