Home Consumer debt Mortgages drive up total household debt by 29% over the past three years

Mortgages drive up total household debt by 29% over the past three years

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StatsNZ’s senior director of wealth and poverty statistics, Andrew Neal, said current figures showed mortgages on family homes were a key driver of total household debt.

“Mortgage debt on the family home, which increased by 30% from 2018 to 2021, was the main reason for the increase in total household debt,” Neal said.

Other home loans, up 44%, also contributed to the increase, he said.

The largest portion of debt incurred by Kiwi households is housing debt, which accounts for 89% of total money owed (excluding trust properties).

Consumer loans, student loans and other loans and debts account for the remaining 11%.

Student loan debt remained virtually unchanged, while other loans showed a slight decrease, between the two survey periods (2015 to 2018 and 2018 to 2021), confirmed StatsNZ.

The survey of 4,400 households shows that for every $100 in total assets, Kiwi households owe just over $14 in liabilities.

Of Kiwi households that have a mortgage, half have less than $260,000 in debt on their homes – and the other half have more.

“While only 32% of households have a primary residence mortgage, for these households, median home debt rose to $260,000 in the year ending June 2021, up from $56,000 on three years,” StatsNZ said.

For Kiwis over 15, the average debt per person was $188,000, up $37,000 (24%) from the year ending June 2018.

What households are worth

The median “net worth,” defined as household assets minus their liabilities for the year ending June 2021, was $397,000.

Compared to the year ending June 2018 at $328,000, net worth is up 21%, StatsNZ said.

The increase in the value of owner-occupied dwellings (houses, apartments, etc.), other real estate and property held in family trusts were the main drivers of the increase.

For every $100 of property owned by New Zealand households (including property held in family trusts), they owe $25 in home loans, according to data from StatsNZ.

Net worth generally increases with age – Kiwis between the ages of 15 and 24 had the lowest median net worth at $3,000. People aged 65 to 74 had the highest median net worth, at $433,000.