KEY POINTS:
New Zealanders' mortgage debt grew by $1 billion to top $150 billion last month.
The 0.7 per cent increase, seasonally adjusted, was the smallest monthly increase for five years, Goldman Sachs JBWere economist Shamubeel Eaqub said.
Households were now very highly leveraged, with average debt equivalent to 170 per cent of average disposable income. And they are devoting a high 15 per cent of income to debt servicing.
That average figure is diluted by the fact that most households do not have a mortgage.
With this degree of leverage and 76 per cent of assets in homes the household sector's exposure to a downturn had the potential to be larger than previously experienced, Eaqub said.
While it was unusual for house prices to fall in nominal terms, it had happened in 1991, 1998 and 2000. "They can't all be anomalies," he said.
