Housing boom boost spending
Wednesday 25 August 2004
One side effect of the housing boom has been that New Zealanders borrowed an estimated $3 billion against the increasing value of their homes in the year ended March, according to Westpac Bank economists.
By The LandlordReserve Bank figures show New Zealanders’ total borrowing against housing at the end of March was $89.4 billion, up from $76.8 billion at the end of March 2003, a $12.5 billion increase.
The Westpac economists hasten to qualify this estimate by saying it is difficult to measure exactly due to such factors as the propensity of small business owners to borrow for business purposes against the value of their homes.
Nevertheless, New Zealanders rank as the second most likely among OECD nations, behind only Britain, to increase their spending on consumption as a result of rising house prices.
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