New Zealand hospitality closures jump 49% as more than 130,000 carry mortgages above $1m

Hospitality business closures in New Zealand rose 49 per cent over the past year. According to new household debt statistics reported by RNZ, more than 130,000 people carry mortgages above 1 million New Zealand dollars. Read together, the two figures suggest that pressure on consumers is becoming persistent.

New Zealand Restaurant Association representative Marisa Bidois said sector closures were the 'joint output of cost pressure and weak demand'. Former associate minister of finance Brad Olsen, in comments to RNZ, said consumer confidence was 'relatively fragile against the high-rate corridor'.

The Reserve Bank of New Zealand (RBNZ) will reassess the official cash rate at its upcoming monetary-policy meeting. Market participants said the lagged pass-through of costs in the high-mortgage household segment would be tracked closely. RNZ also reported that unemployment and retail-sales prints would be indicative of second-half sector dynamics. ASB Bank senior economist Mark Smith said a rate-cutting path would lead to a 'gradual recovery' in consumer confidence.