Total household debt increased 29 per cent from the year ended June 2018 to the year ended June 2021, Stats NZ says today.

Household debt or liabilities is the amount of money borrowed from another party, like mortgages, student loans, and debt on credit cards.

'Mortgage debt on the family home, which increased by 30 per cent from 2018 to 2021, was the main reason for an increase in total household debt. Other real estate loans also contributed to the increase, rising 44 per cent,” says wealth and poverty statistics senior manager Andrew Neal.

Property debt represents 89 per cent of New Zealand's total household debt, not including properties held in a trust. Debts on the primary residence accounts for 66 per cent of total household debt.

Consumer durable loans, education loans, and other loans and liabilities remain at similar levels to 2018, and together make up the remaining 11 per cent of total household debt.

The year ended June 2021 net worth release, based on a survey of over 4,400 households collected between August 2020 and June 2021, shows that for every $100 of total assets held by New Zealand households, they owe just over $14 in liabilities.

While only 32 per cent 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.

This means that half of New Zealand households with a mortgage have a debt on their house of less than $260,000 and the other half has over $260,000 worth of property debt.

Median owner-occupied dwelling assets, as assessed by Councils' capital (or rateable) value, increased from $435,000 in the year ended June 2018 to $550,000 in 2021; up $115,000 over the three years. (See Net worth statistics: Year ended June 2021 – Information and improvements for more information on the approach taken to property value.)

'Recent years have seen an increase in both housing values and mortgage debt,” says Neal.

Classification of households by income shows that those in lower income quintiles tend to have smaller debts, which may reflect constraints on their ability to borrow, for instance to take out a mortgage.

It is also notable that those in the lowest 20 per cent of income earners hold similar levels of debt to those in the next quintile.

'Our survey data shows households that have larger incomes are borrowing more to purchase assets, particularly a home.”