Mortgage applications fall 21% in first half, Veda says

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New Zealand applications for home loans fell 21% in the first half from a year earlier, according to a survey by Veda Advantage, the nation's biggest credit information service.

Wednesday, July 16th 2008, 1:10PM

by Jonathan Underhill

"Things look quite bleak for the property market at the moment," said John Roberts, New Zealand director of Veda. "Things are likely to get worse before they get better."

The first biannual survey by Veda adds to evidence the economy fell into recession in the first half, amid soaring costs for fuel, raw material and credit. Commercial sector defaults rose 24% in the first half, while consumer defaults gained 7%.

"The overall picture of the economy contains little good news for those hoping predictions of a coming recession are exaggerated," the company said in a statement.

There was a sharp jump in the number of people defaulting on basic payments such as their phone bills, where the figure soared 148% and internet payments, up 100%, the survey showed.

Consumer confidence has tumbled to a 17-year low, according to the Westpac McDermott Miller Consumer Confidence Index last month. The index fell 15 points to 81.7. A number below 100 indicates pessimists outnumber optimists.

Veda's survey showed total consumer credit applications fell 10% in the first half, with hire-purchase applications down 9.5% and those for personal loans dropping 16%.

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