Centrix data shows uneven credit recovery
Fewer New Zealand households are falling behind on their payments, but the overall credit picture is still far from stable, according to new data from Centrix.
Consumer arrears fell to 11.72% of the credit-active population, down from 12.09% in February and 7.1% lower than a year earlier. The number of people behind on payments also declined by 14,000 to 459,000. Still, not all borrowers are seeing relief.
Around 95,000 consumers remain more than 90 days overdue, pointing to ongoing financial stress among a smaller group. At the same time, lending activity continues to hold up. New household lending rose 11.1% year-on-year, with mortgage lending up 10.7% and non-mortgage lending up 15.6% in the March quarter.
Demand for credit is still higher than last year overall, but momentum is slowing. Total consumer credit demand is up 1.3% year-on-year, led by mortgages, auto loans, and personal loans. In contrast, credit card and retail energy demand declined, showing a more uneven pattern across products.
Unsecured lending remains the main area of concern. Personal loan arrears sit at 10.0%, largely unchanged from a year ago, while hardship cases in this category have risen 39% and now make up nearly a quarter of all hardship accounts.
Overall financial hardship cases eased slightly to 13,400 accounts. Mortgage-related cases still make up the largest share at 37%, followed by credit cards at 34%.
Buy Now Pay Later arrears improved to 8.8% as the product continues to be widely used by first-time borrowers. In 2025, 245,000 consumers opened their first credit account, with 32% doing so through BNPL.
Centrix chief operating officer Monika Lacey said the data reflects “a more unsettled point in New Zealand’s economic recovery,” noting that the Reserve Bank kept the Official Cash Rate at 2.25% while warning that events in the Middle East have “materially altered the outlook for inflation and growth.”
Higher fuel costs are expected to add pressure on household and business budgets, with the full impact yet to be felt, according to Centrix.
In the business sector, credit demand fell 3.8% year-on-year, although some industries continued to expand. Hospitality demand rose 26%, while agriculture increased 10%.
Company liquidations remain elevated. There were 3,023 liquidations on a rolling 12-month basis, up 15% year-on-year, with March recording the highest number of liquidations for that month since 2015.
Construction recorded the most liquidations over the past year, followed by hospitality, where failures increased 49% compared with the previous year.
Some indicators are improving. Business credit defaults fell 16% year-on-year, and several sectors, including agriculture and manufacturing, showed better trends. However, pressure is building in parts of the services sector. In “Other Services,” liquidations rose 40% year-on-year, with automotive repair and maintenance among the hardest hit.
“Overall, April’s figures suggest credit conditions are continuing to improve, particularly for households, but the whole picture remains uneven,” Lacey said.
