NZ: Drag on household spending - Westpac

In recent years, the combination of low interest rates and the favourable tax treatment of housing saw NZ house prices rising rapidly, according to Satish Ranchhod, Senior Economist at Westpac.

Key Quotes

“These same conditions also saw household debt rising to record levels. Now, with the housing market cooler than it was in previous years, the creep upwards in household debt has slowed. And over the coming years, policies aimed at dampening housing market pressures will put a brake on further debt accumulation. These changes also signal a drag on household spending, and will have an important impact on the RBNZ’s policy stance.”