New credit data from Centrix reveals that the number of New Zealanders behind on their payments decreased by 11,000 in February, reaching 480,000.
Despite the overall number remaining high, Centrix said the year-on-year arrears levels have decreased by 1% for the second consecutive month, suggesting early signs of a gradual recovery in the credit cycle.
Mortgage arrears also showed a slight decrease, with 400 fewer reported as past due compared to the previous month.
“Looking at the latest New Zealand credit insights, green shoots of optimism can be observed,” Centrix managing director Keith McLaughlin said.
“The annual rate of growth has eased in recent months, indicating that early arrears have now stabilised, with new mortgage lending up 22% year on year.”
While there is a slowdown in the rate of increase in February, financial hardship cases remain 16% higher compared to the same period last year.
Company liquidations have also seen a 37% year-on-year rise. In February 2025, there were 236 liquidations, up from 192 in February 2024.
Construction firms, property operators, and takeaway food businesses have been found to be the most frequent types entering liquidation.
Liquidations in the agricultural sector have also increased by 20% during the past year. However, Centrix noted that signs of recovery are beginning to appear across the sector, with growers, dairy farmers, and livestock producers experiencing positive trends in recent months, supported by strengthening export returns that contribute to national economic recovery.