The number of Kiwis falling behind on debt payments rose in December when compared with the month before, a new report says.
According to the latest report from Centrix, the number of people behind on payments climbed to 439,000 — a month-on-month jump of 4000.
Centrix managing director Keith McLaughlin said this bump was "aligned to seasonal trends".
It came as December and January saw consumer credit demand across both personal and buy now pay later schemes up 3% compared with 12 months ago.
McLaughlin said it comes "as people turned to credit to take advantage of the holiday retail sales season".
In December, more than 400,000 people fell behind on credit payments, while the number of mortgage accounts past due exceeded 20,000. (Source: 1News)
December also saw a "substantial" 21% spike in the number of mortgage accounts past due compared with 2022, exceeding 20,000.
Despite this, the number of first-home buyers made up almost a quarter (24%) of all new residential mortgage lending across 2023's fourth quarter.
Loan conversion rates saw a "dip" of 11% compared with last year. McLaughlin said this "aligns with broader economic shifts".
It follows new regulations added to the CCCFA in 2021, which limit how much lenders and mobile traders can charge in interest and fees for high-cost loans.
"Although there has been a subsequent rebound in approvals, it remains to be seen whether the Government will review the CCCFA rules further to adapt regulations and response to evolving economic circumstances," McLaughlin said.
In the business sector, 2023 saw an increase in the number of company collapses compared to 2022.
Business credit card defaults rose 27% year-on-year, while the number of liquidations rose 16% compared with 2022.
"Most impacted were the retail trade and construction sectors, reflecting the economic challenges facing many Kiwi business owners at the moment," the Centrix report reads.
It said construction companies were more than twice as likely to fail than any other business, with 26% of all liquidations coming from the sector.
The Centrix report said credit card defaults in the industry have been "rising fast", with small firms up 47% in the last year.
McLaughlin offered some advice for Kiwis so that they can manage their debt.
"With the new year in full swing, there are bound to be many resolutions to organise finances and get ahead of the curve," he said.
"Now's the time to take stock of your financial well-being and seek advice if you're feeling the pinch following the summer break."
He said "all eyes" are now on the Government "to see how they tackle the economic climate".
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