\u201cBut I think we\u2019re just starting to see a little bit of flow-through of the increase in things like insurance and rates, really just starting to make it a little harder to see those arrears drop.\u201d<\/p>\n
McLaughlin said he was confident that consumers were now getting on top of it.<\/p>\n
\u201cI think there\u2019s just that little blip where there\u2019s been a bit of an increase in pressure on the household budget.\u201d<\/p>\n
AdvertisementAdvertise with NZME.<\/a><\/p>\n Meanwhile, mortgage arrears<\/a> fell for the second consecutive month in June to 21,600, albeit just 300 fewer than in May.<\/p>\n McLaughlin said reductions in the Official Cash Rate (OCR) were starting to have an impact on mortgage arrears.<\/p>\n \u201cWe\u2019re finding interest rates are returning to a lower base than they have been \u2026 that has enabled mortgage holders to maintain their payments.<\/p>\n \u201cWith 79% of mortgages due to be repriced over the next 12 months, many borrowers may benefit from lower rates.<\/p>\n \u201cI think we will see an ongoing impact on that, but what we\u2019re seeing today has been somewhat negated by the increase in the non-discretionary spending,\u201d he said.<\/p>\n \u201cIncreases in rates, insurance and power does make it very hard to get the benefit out of those reductions in interest rates.\u201d<\/p>\n Since August last year, the OCR has been cut by 225 basis points (bps)<\/a>.<\/p>\n The number of accounts reported in financial hardship in June was 14,450, down 550 from the prior month, Centrix said.<\/p>\n Year on year, financial hardships increased 7.1%, but the rate of growth has eased in recent months.<\/p>\n Elevated stress for small businesses<\/p>\n McLaughlin said small businesses were facing elevated levels of mortgage stress, with many relying on home equity to fund and sustain operations.<\/p>\n AdvertisementAdvertise with NZME.<\/a><\/p>\n \u201cWe\u2019re really quite concerned about that. Consumer spending is still quite cautious, and I think that\u2019s having a flow-on impact into the cash flow on those small businesses.<\/p>\n \u201cConsequently, we are seeing quite a rise year on year with liquidations and with company arrears.\u201d<\/p>\n Overall, company liquidations rose 26% year on year in June, with the hospitality sector now the second-largest industry contributing to liquidations.<\/p>\n In the 12 months to June, 288 hospitality businesses were placed into liquidation, up from 199 the previous year.<\/p>\n Hospitality businesses are more than twice as likely to fail as the typical New Zealand business.<\/p>\n \u201cThis is a clear sign that the industry continues to struggle with rising operating costs and shifting consumer spending patterns,\u201d McLaughlin said.<\/p>\n