Mortgage spending continues to plummet as homebuyers across the country sit on the sidelines of a downturn in the real estate market.
Equifax New Zealand’s consumer credit demand index for the three months to March showed overall consumer credit demand down 6.2% from a year ago, the lowest point since the first Covid-19 lockdowns in 2020. has been reached.
Demand for mortgages, meanwhile, plummeted to a fifth of what it was a year ago.
Managing director Angus Rahman said demand for mortgages had fallen for the seventh straight quarter and he expects the housing market weakness to persist into the second half of the year.
“Mortgage demand has been really depressed since early 2021 and is gradually declining,” he said.
“After stabilizing into 2022, overall volumes are soft again in the first quarter of this year.
“We expect this to mean a softening of the market over the next few quarters.
“Consumers are very cautious at the moment, and you would expect that. Taking on new commitments when you’re in a cautious environment is something people don’t often do.”
In a regional breakdown, a significant drop in mortgage demand was seen in areas that were most affected by the adverse weather conditions.
The largest decreases were recorded in Nelson (-29.5%), Gisborne (-26.2%) and Hawke’s Bay (-23.9%). This is currently at its lowest point since the index began in 2019, compared to a -19.6% year-over-year decline in the national figure for mortgage applications.
Meanwhile, unsecured credit applications, including credit cards and personal loans, increased 0.7% year-over-year nationwide.
Demand for credit cards continues despite depressed consumer sentiment. Card usage increased 18.7% due to travel spending.
https://www.rnz.co.nz/news/business/488102/mortgage-demand-drops-by-fifth-as-property-market-slumps-further Mortgage demand falls by a fifth as property market weakens further