The value of non-performing housing loans rose by $165 million in January - the biggest monthly surge since June 2020 during the pandemic, according to the latest Reserve Bank (RBNZ) loans by asset quality figures.
The total of non-performing housing loans was $2.38 billion as at the end of January.
Breaking the figures down; during January the amount of impaired loans rose by $27 million to $457 million, while the amount of 90 days past due, but not impaired, loans rose by $138 million to $1.871 billion.
The $2.38 billion total of non-performing housing loans makes up 0.64% of the $365.5 billion outstanding mortgage stock.
That 0.64% non-performing loan ratio figure is the biggest for housing loans since 2013, but is still some way below the 1.2% figures seen between 2009-11 in the post-global financial crisis period.
The latest spike in non-performing loans comes as bank mortgage rates are going down. About 55% of outstanding mortgages are due for an interest rate reset in the first half of this year, with over 82% of the total mortgage book due to be reset during 2025.
Relief is coming, but obviously not quickly enough for some.
While advertised mortgage rates have come down fairly swiftly, with fixed rates now down by anything up to 200 basis points from their peak highs, the yields banks are receiving are coming down much more gradually as loans take time to roll over and be reset.
The most recent yield figures available at time of writing were for December, which showed that the yield across the whole mortgage book was 6.29%, down only slightly from the peak figure of 6.39% reached in October 2024.
And in terms of the fixed rate mortgages, the yield figure in December was 6.33%, barely down on the peak of 6.34%, also in October.
Mortgage rates began rising in the second half of 2021 in response to soaring inflation and ahead of a big wave of RBNZ Official Cash Rate hikes that began in October 2021.
The non-performing loans figures didn't show a noticeable increase for about a year after rates started rising.
At the end of 2022 the non-performing loans figure was $850 million. However, since then it has risen by $1.478 billion (174%) to the current $2.38 billion.
It is notable that between the Christmas period and January in each of the last three years there have been big spikes in the non-performing housing loan figures.
In terms of banks' system-wide non-performing loans the ratio blipped up to 0.76% in January. That's just very slightly below the short-sharp peak seen in June 2020, but apart from that single month, the latest system-wide non-performing loan ratio figure is the highest seen since 2015.
For the record, the grand total of non-performing loans is $4.378 billion versus a total book of $576.43 billion.
18 Comments
$165mil more in Feb 2025
$245,535 an hour...
Probably Nothing
$0.05 per person per hour. Yes, you're right, probably nothing.
Given the level of affordability that probably represents a household falling behind every 2 hours..
12 a day
84 a week
336 for the month
Dividing ITG's numbers by the total NZ population makes zero sense. Do you believe everyone has a mortgage?
Desperation? Denial? Early onset D.....
Agreed. One notes it was reported last year that only a third of houses have mortgages so its even less.
Recessionary times would be a guide that things ain't getting better. Banks doing their job should be starting recovery process at 90 days plus default.
It's astonishing that these numbers aren't much higher given the high Interest rates that (most) people are now paying.
I think we are now seeing the impacts of job losses....
This number will continue growing
Trademe has 64 Mortgagee sale listings, 33 in Auckland
We've been hearing here for months mortgagee sales were going to explode... hasn't happened - steady at a very minimal amount.
Non performing loans are growing much faster then house prices... you will be hearing more about it as time goes on.
The first time I looked I saw 53 on Trademe, then 57, now 63.
lets watch it , perhaps chart it...
There's been comments exactly like that 1 year+ ago with Trademe ancedotes... and it still looks them same.
Banks are doing everything they can to avoid mortgagee sales.
Might see a reverse homeownership trend appear in the next census (assuming people are willing to submit returns in future after the compromised confidentiality last time)
"The release of data from the 2023 census has revealed more New Zealanders own their own home compared to the previous census"
https://www.rnz.co.nz/news/national/529739/home-ownership-figure-in-cen…
An acquaintance is selling post defacto split. They have been funding the situation for a year but rolled to today's interest rates Oct last year - big ouch. Was a new build that they got gouged an extra 150k on the build during covid. She reports they are on track to take a circa 200k hit on what it owes them, but she is just resigned to moving on, and that most of it is his deposit.
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