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New Zealand's Credit Landscape Improving But Confidence Remains Measured, Centrix Says

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The data suggests credit conditions are improving in New Zealand for many households and businesses, but confidence remains measured and pockets of financial strain are still evident, Centrix said in its June Credit Indicator report on Wednesday.

Consumer credit demand decreased 5.3% year over year in June, with continued strength in auto, personal, and home loan enquiries offset by weaker demand elsewhere, Centrix said.

At the consumer level, fewer borrowers are falling behind on repayments, and arrears rates are continuing to decline, Centrix said. This reflects the combined effect of lower interest rates in recent periods and a slow but steady economic recovery, it added.

The number of consumers behind on payments fell to 432,000, down 11,000 from the prior month, with the arrears rate down some 13% year over year. Consumer arrears improved in May, falling to about 11% of the credit-active population, the lowest level recorded in four years.

For businesses, demand for credit was down 2.4% year over year, but it remained broadly consistent with longer-term trends. Business credit defaults were down 13% year over year on a rolling 12-month basis.

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