New Zealand’s strong housing market is driving retail spending, according to the latest data from Veda.

Carol Chris, managing director of Veda New Zealand, provider of data analytics and credit information, said Veda’s mortgage application data coupled with the strong New Zealand retail sales figures seen over the past several months showed there is a link between the active housing market and retail sales volumes in the country.

“Electronic card spending at retail outlets in New Zealand was up 6.8 per cent in the March quarter, compared to the same period a year ago, according to Statistics New Zealand,” Chris said. “This is a higher annual spending growth rate than reported in the second half of 2015.

Chris said Veda’s their figures showed a slowdown in the mortgage application growth rate from the September 2015 quarter, when growth was at 21.9 per cent. She said the positive movement in mortgage application data and the decrease they have seen in credit card and personal loan applications over the same time period suggested that more home loans, rather than hire purchases or credit cards, are being used as an additional source of funds which is helping to drive retail sales growth.

The continued strength of mortgage applications was in contrast to the volume of personal loan and credit card enquiries to Veda, which declined by 2.9 per cent and 5.4 per cent respectively in the 12 months to the March 2016 quarter, the report stated. Veda’s data also showed the activity in the housing market continues to be driven primarily by consumers in the 28 to 43-year age bracket, which accounted for 46 per cent of mortgage enquiries in the March 2016 quarter.