Credit demand holds up even as house values slip and hardship pressure builds, Equifax finds
Home loan enquiry activity has remained resilient through 2026 despite a softening property market, according to Equifax's latest NZ Market Pulse report.
Year-to-date home loan enquiry volumes are running 8.5% ahead of the same period in 2025, continuing to sit above both 2024 and 2025 levels even as house prices have pulled back nationally.
The national Valocity Value Index fell 0.3% in July and 0.9% over the quarter, with the report noting that "market conditions remained cautious heading into winter, as higher mortgage rates, the upcoming election, elevated living costs, and available housing stock continued to limit buyer urgency."
Regional performance stayed sharply divided: West Coast (+7.5%), Southland (+7%) and Otago (+5%) led annual value growth, while Nelson (-2.5%), Auckland (-2.1%), and Wellington (-1.7%) recorded the steepest declines.
Despite the price softness, the report struck a measured note on demand, observing that "first-home buyers remain active, while investors are still more selective, and future momentum will depend on borrowing costs, confidence and whether elevated listings are absorbed without further pressure on values."
Mortgage arrears stay broadly stable, but unsecured credit shows strain
Home loan 30-day-plus arrears edged up just one basis point in July to 1.15%, remaining six basis points below the same month last year — a result Equifax described as evidence that "broader mortgage repayment performance remains relatively stable." Severe delinquencies (90-day-plus) held flat at 0.29%.
The picture was less settled elsewhere in the credit book.
Personal loans hardship rose 5.6% quarter-on-quarter alongside a 5.3% increase in mortgage hardship accounts, while credit card 30-day-plus arrears jumped nine basis points in July — the largest monthly increase across any lending category, which the report flagged as "pointing to some renewed strain in short-term credit management."
Auto loans bucked the trend, with arrears falling seven basis points to continue a longer-run improvement.
That relative mortgage-book stability comes as the rate backdrop shifts: the Reserve Bank lifted the OCR 25 basis points to 2.75% on 2 September — its second hike this cycle — after annual inflation climbed to 4.1% on an oil price shock tied to the Middle East conflict.
Separate Centrix data this month shows mortgages remain the largest category of financial hardship nationally, at 38% of cases.
Consumer caution persists despite spending rebound
Retail card spending rose 1.3% in July after a June dip, but Equifax cautioned the lift was "better viewed as a stabilisation signal rather than a broad-based spending upswing," particularly with seasonally adjusted retail sales volumes falling 0.5% over the June quarter — the first quarterly decline since December 2024. Consumer confidence held broadly steady in August at 98.0, still below the neutral 100 mark.
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