NZ Mortgage Market Resilient Amid Cost-Of-Living Pressures
New Zealand's mortgage market is showing resilience in the face of cost-of-living pressures, but unsecured lending is under strain.
According to Equifax's latest NZ Market Pulse, secured lending has proven more durable than other parts of the credit market. Mortgage performance remains remarkably resilient, with home loan arrears softening again in June to 0.5%, and overall mortgage hardship levels sitting more than 16% below where they were this time last year.
The data also shows a widening two-speed property market, with South Island regions like Southland, West Coast, and Otago delivering annual gains, while major metropolitan urban centers continue to slide. Auckland remains the weakest metro market at negative 2.5% YoY, driven by weaker employment sentiment, higher borrowing costs, and elevated property supply.
Household spending is coming under renewed pressure, with annual inflation climbing to 4.1% in the June quarter, its highest level in two years, as the Reserve Bank lifted the official cash rate to 2.5%. Kiwis are taking a much more selective approach to their spending, prioritizing core essentials over discretionary buys.