Mortgage applications are falling – good returns
Credit bureau Centrix says Omicron and the threat of inflation are eroding consumer confidence.
Tuesday, May 3, 2022 at 10:01 am
According to this, overall demand for consumer credit fell by 6% year-on-year.
Mortgage applications are down 12% and credit card applications are down 35%. Applications for personal loans are down 8%.
And the people who continue to borrow find it harder to pay the interest bill.
Total arrears rose 5% in the year to March, while arrears on unsecured personal loans rose 9%.
According to Centrix, mortgage and auto loan payments are proving to be exceptions. Arrears in these sectors remain at consistently low levels as people turn their attention to paying those bills first.
Looking at the value of new loans as a whole, it was 30% lower in March than a year earlier.
The value of new mortgages fell 31%, while non-mortgage loans fell 11%.
And Centrix presented more numbers showing that people were opting for longer-term mortgages than they used to.
Across the country, there were 1.4 million mortgages worth $300 billion.
The negative statistic in mortgages and personal loans was partially offset in the commercial loan space.
While loan demand was also down 7%, people applying for a loan had, on average, a slightly better credit rating than a month earlier.
This was noted in the hospitality sector, which showed some signs of recovery from the lockdown doldrums.
But tourism and agriculture remained in trouble partly because of labor shortages.
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