Financial stress stabilises while household credit demand picks up

Fewer borrowers are now falling behind on debt repayments.

Borrowers who had previously been in default are finding ways to mitigate stress with the lower debt-servicing costs, the RBNZ says.

Longer-term arrears and impairments have stabilised, but have not improved materially yet, although banks expect non-performing loans to continue to drop over the next year, supported by improved borrower cashflows.

The RBNZ’s September figures for non-performing loans show they have dropped for three months in a row to $2.27 billion, down by $185 million.
Instances of mortgagee sales remain low.