Credit check

Kiwis prioritize three main things during winter months, says credit check manager


Keith McLaughlin, managing director of credit bureau Centrix, says home and auto loans are usually the last credit payments people let slip. Photo / Provided

The number of delinquent credit accounts rose 14% in July from July last year, but fell slightly from May as vehicle arrears began to rise, according to the company’s latest data. Centrix credit assessment.

“Products like mortgages and car loans – secured lending products – are typically the last credit payments people let slip, indicating that we may be starting to see signs of financial stress,” said the Centrix CEO Keith McLaughlin.

“However, it is encouraging to see that delinquent home loans are steadily declining and utility arrears are at an all-time low as Kiwis prioritize their housing, electricity and other items. essential during the cold winter months.”

New mortgage lending has now returned to pre-pandemic levels, but remains subdued compared to 2021.

This is not surprising, given the sharp 38.1% drop in residential property sales volumes in June compared to June of last year and the 9.5% drop in house prices compared to June. compared to last November’s summit.

Business impact

Centrix said the corporate sector was feeling the impact of inflation and wary of discretionary spending, while the retail sector was suffering from both an increase in defaults and a drop in debt. activity, as well as staff shortages and supply chain issues.

Business credit demand is down 12% from July last year.

But, with the reopening of the borders, the tourism sector is experiencing strong activity.

“Looking specifically at credit users under the age of 30, it is interesting to see over 620,000 active credit accounts in this age bracket, with 46% opening a BNPL. [buy now, pay later] account as the first instance of credit use. »

Nevertheless, new inquiries from BNPL clients have decreased by 30% compared to July last year.

Overall, demand for new credit products fell 6% in July, with mortgage applications down 29% from July last year. New mortgages were down 18%.