Kiwis teeter atop debt mountain

Sunday 15 February 2004

The residential property market is close to sinking under the weight of its own mortgage debt.

By The Landlord

Reserve Bank figures show mortgage debt has ballooned in the past two years, from $67.9 billion in December 2001 to $86b at the end of 2003.

If New Zealanders keep borrowing at the same rate, total mortgage debt will exceed $100b in 12 months.

That is leading to concerns that many households are so loaded with debt that even a small rise in interest rates or reduction in their disposable income could mean they struggle to meet repayments.

The problem is becoming acute because the debt mountain is not spread evenly across households.

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