Advisers gain longer window to restructure client debt
Kiwi mortgage advisers are heading into 2026 with a more supportive backdrop, as card spending lifts, borrowers roll onto cheaper fixed rates and labour‑market conditions stabilise rather than slump.
Spending momentum holds into 2026
Westpac’s Retail Spending Pulse shows per‑person spending on Westpac‑issued debit and credit cards was up 6% in January compared to a year earlier.
Senior economist Satish Ranchhod (pictured) says “retail spending growth has held firm in the early part of 2026,” and even after allowing for higher prices, “consumers’ spending appetites look like they’re on the rise as we’ve entered 2026.”
Part of the lift reflects inflation, with consumer prices having risen 3.1% over the past year and noticeable price increases across big‑ticket items like appliances and furnishings. But the broad-based gain in per‑person spend still points to improving confidence and a more resilient income backdrop for many households.
Discretionary spend lifts alongside essentials
Households are continuing to spend more on essentials such as groceries, petrol, utilities and insurance as the cost of living rises. Encouragingly, discretionary outlays are also climbing. Ranchhod highlights “particularly large increases in spending in the hospitality sector, as well as in‑creased sales of furnishings and other household durables.”
That strength is showing up across the country. Regions like Canterbury, Otago and Southland are being underpinned by firm commodity export prices, while Auckland and Wellington are also seeing solid increases, even though spending levels in the Capital remain below other centres.
RBNZ on hold, labour market context supports rate outlook
In addition to export strength, lower borrowing costs are now a key driver of spending appetites.
Widespread mortgage fixing meant it took time for earlier rate cuts to filter through, but with the OCR now on hold and markets pricing in a long pause, large numbers of loans rolling onto lower fixed rates are finally delivering those earlier reductions into household budgets.
Unemployment ticked up to 5.4% in the December quarter as more people entered the workforce, with employment rising 0.5% and ASB’s Mark Smith saying the figures “show the economic expansion flowing through into hiring,” even as the jobless rate hits a “10-year high.” That suggests a labour market with slack and more clients in transition, rather than a collapse in job prospects or household income.
For advisers, this combination – borrowers quietly refixing at lower rates, a jobs market that is soft but still adding workers, and an RBNZ likely to move only gradually – suggests a longer window to restructure debt, lock in more affordable terms and help clients manage cash flow before the next tightening cycle eventually arrives.
Read Westpac's Retail Spending Pulse here.
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