Mortgages drive total household debt up 29 percent over last three years

Mortgage debt increased 30 percent between June 2018 and June 2021, according to StatsNZ net worth figures.
Mortgage debt increased 30 percent between June 2018 and June 2021, according to StatsNZ net worth figures. Photo credit: Getty Images.

Mortgages are driving up debt among Kiwi households, with new figures showing a 29 percent increase in total debt over just three years.

Released by StatsNZ on Thursday, Household Net Worth figures show from June 2018 to June 2021, the amount of money owed on mortgages increased by 30 percent.

Three years' earlier (June 2015 to June 2018), mortgage debt increased by 18 percent, StatsNZ confirms.

StatsNZ wealth and poverty statistics senior manager 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 percent from 2018 to 2021, was the main reason for an increase in total household debt," Neal said. 

Other real estate loans, up 44 percent, also contributed to the increase, he said.

The biggest portion of debt taken on by Kiwi households is property debt, making up 89 percent of total money owed (excludes properties in trusts).

Consumer loans, student loans and other loans and liabilities, make up the remaining 11 percent.  

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

The survey of 4400 households shows for every $100 of total assets, Kiwi households owe just over $14 in liabilities.

Of the Kiwi households that have a mortgage, half have a debt on their house less than $260,000 - and the other half have over.   

"While only 32 percent of households have a mortgage on the primary residence, for those households, the median property debt increased to $260,000 in the year ended June 2021, up $56,000 over the three years," StatsNZ said. 

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

What households are worth

Median 'net worth', defined as households' 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 has increased 21 percent, StatsNZ said.

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

For every $100 of property owned by New Zealand households, (including property held in family trusts), they owe $25 in real estate loans, StatsNZ data shows.

Net worth typical increases with age - Kiwis aged 15-24 years had the lowest median net worth at $3000. Those age 65-74 had the highest median net worth, at $433,000.