Increasing debt costs to hit budgets by $100 plus a week
In an economic note, it anticipates the average debt servicing cost facing households will peak at about 6.2% in the middle of this year, 340 bps above 2021 lows. Compared to 2021, this will add slightly more than $100 per week of costs for each household – an extra $12 billion per year – to nationwide household debt servicing.
About 90% of this tightening has been experienced so far, Mark Smith, ASB senior economist says.
Household debt is sizable. RBNZ figures place the stock of household debt in the region of $368b or about 165% of household disposable incomes and slightly more than 90% of nominal GDP.
This equates to about $185k for each private dwelling, of which more than 95% is mortgage debt.
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