NZ Mortgage Market Holds Firm Amid Rising Cost of Living

New Zealand's mortgage market remains resilient despite sustained cost-of-living pressure and increasing interest rates. According to Equifax, secured lending has proven more durable than other parts of the credit market.

In June, home loan arrears softened again to 0.5%, with overall mortgage hardship levels sitting more than 16% below where they were this time last year. However, household spending is coming under renewed pressure as annual inflation climbed to 4.1% in the June quarter, its highest level in two years.

The combination of higher interest rates and increased living costs has led Kiwis to become more selective with their spending, prioritizing core essentials over discretionary buys. As a result, retail card spending fell 1.4% in June.