Consumers are in the mood to spend, encouraged by low interest rates and a strong job market.
Non-mortgage lending rose 38 percent in June. Photo: 123RF
Data from credit bureau Centrix shows non-mortgage lending, which includes credit cards, personal loans and buy now pay later schemes, rose to more than $600 million in June, a 38 percent increase on May.
The managing director of Centrix Keith McLaughlin said most of the spending had been on high-priced luxury items, such as top of the line vehicles.
"When people are buying luxury items such as motor vehicles, it tends to reflect the confidence in the marketplace, confidence that they have jobs that they are secure in their employment.
"When the lending falls away, it shows that there is some lack of certainty in future incomes," he said.
While interest rates remained low, demand for credit cards was flat and well below pre-pandemic levels, while applications for new mortgages cooled over the past couple of months, but not by as much as had been expected given government efforts to cool the housing market.
"I think new home lending has fallen away slightly which is reflective of what's happening in the marketplace," McLaughlin said.
There had also been a sharp increase in personal loan arrears, rising 0.6 percent to the highest level since March 2020.
The number of accounts reported past due rose by 1.2 percent, though the rate remains at historically low levels.
The rate of mortgage delinquencies fell in May for the second month in a row with nearly 2 percent of 16,400 accounts past due.