New Zealand’s credit landscape is showing signs of resilience as 2025 draws to a close, with the latest Centrix Credit Indicator reporting rising demand and the lowest arrears levels in more than two years.
Centrix says recent cuts to the Official Cash Rate have begun to reshape credit conditions, with last week’s reduction expected to reinforce the trend.
Consumer credit demand is up 4.8% year-on-year ahead of Black Friday, driven by increased personal loan activity and stronger mortgage enquiry volumes.
Demand for credit cards and retail energy credit, however, continued to fall, down 22.2% and 11.7% respectively.
Household lending has strengthened, with new lending rising 13.2% year-on-year. Mortgage activity remains elevated as refinancing gains popularity among borrowers seeking lower rates, now accounting for more than 30% of new mortgage lending compared with 22% three years ago.
New mortgage approvals rose 13.8% in the October quarter but remain 9.1% below the market peak in 2021.
Consumer lending also expanded, with credit card, vehicle loan, personal loan, Buy Now Pay Later and overdraft lending up 7.0% year-on-year.
Arrears trends continue to improve. Consumer arrears dropped to 11.83% of the credit-active population in October, down from 11.99% a month earlier and the lowest level in more than two years.
Centrix reports 459,000 consumers were behind on payments, with 177,000 at least 30 days past due.
Mortgage arrears also eased, falling to 1.35%, the lowest level since November 2023, with 20,900 mortgage accounts in arrears.
Credit card arrears lifted slightly to 3.9% but remain 11% lower than a year ago, while auto loan arrears held steady at 5.1%, well down from the March peak of 6.5%.
Business credit demand climbed 3.0% year-on-year, with hospitality leading growth at 38%, followed by education and training at 22% and retail trade at 19%.
The average credit score for new business applications inched up to 749, though still slightly below last year’s level.
Despite the positive momentum, the corporate sector remains under pressure. Company liquidations reached their highest monthly total since 2011 in October, reflecting both financial strain and increased IRD auditing and enforcement activity.