Credit agency Centrix’s October monthly report revealed that consumer arrears declined to 459,000, representing roughly 12% of all borrowers, down from 465,000 the previous month—reaching the lowest level in over two years.
Chief operating officer Monika Lacey said recent Official Cash Rate (OCR) cuts were starting to positively transform the credit outlook, a trend she anticipated would persist following last week’s OCR cut.
“New household lending rose 13.2% year-on-year, and mortgage enquiries remain elevated, as refinancing continues to be popular among borrowers seeking lower rates,” Lacey said.
“Consumer credit demand is rising ahead of Black Friday, up 4.8% year-on-year, with personal loan demand increasing as the retail sales season ramps up.”
Meanwhile, demand for credit cards dropped by 22.2%, which Lacey attributed to their declining popularity among younger consumers.
Business credit demand increased 3% year-on-year, Lacey said this indicates steady growth across key sectors.
Credit demand was highest in the hospitality sector, increasing by 38% over the past year, followed by education and training at 22% and retail trade at 19%.
Construction continued to face challenges, with credit demand dropping by 11%, while credit demand in the transport sector decreased by 4%.
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