Consumer arrears are on the rise as households feel the effects of higher living costs and rising interest rates.
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The latest data from credit bureau Centrix shows overall arrears went up 13 percent year-on-year in July.
Arrears on personal loans went up 7.9 percent and vehicle arrears rose for a fourth straight month. Arrears on Buy Now Pay Later accounts and credit cards have also climbed.
Centrix managing director Keith McLaughlin, said vehicle repayments were traditionally one of the last repayment obligations people let slip, and ongoing growth in arrears may indicate underlying pressure for households.
McLaughlin said eyes were now on mortgage arrears.
"At the moment mortgages are not increasing in arrears so they're very much under control which is very encouraging from our perspective.
"But we would expect to see it move along the chart and we would expect to see home lending start to go into arrears as the current squeeze in household budgets continues," he said.
Mortgage applications fell 25 percent year-on-year, as the real estate market cooled.
But first-home buyers who had recently bought properties would find the average home loan had fallen by $65,000 in the last six months due to the cooling market, Centrix said.
In terms of business defaults, retail and construction sectors continued to do it tough as they faced lower activity.
At the same time, tourism and hospitality were seeing increased activity and lower defaults as overseas visitors returned.