RBNZ Reports on Rising Loan Defaults in New Zealand

Following President-elect Trump's victory, mortgage rates have risen, touching 7.13%, while experts predict they may remain elevated. Trump’s proposals to reduce mortgage rates and increase housing supply through federal lands may not yield immediate results, with the housing supply crisis persisting amid a lack of quick fixes. In Australia, mortgage delinquencies are forecasted to rise, particularly in Melbourne, as the economy faces challenges. In Canada, increasing auto loan defaults are raising concerns about potential mortgage payment issues, with over 1.2 million homeowners facing rate renewals in 2025 that could see increases of up to 30%. New Zealand's financial system remains resilient despite rising unemployment, though more defaults are expected as debt servicing costs peak. The Reserve Bank of New Zealand anticipates that while defaults may rise, the banking sector is well-prepared for economic shocks.