The Rise of the Million-Dollar Mortgage in New Zealand
RNZ data show the number of New Zealand mortgages of one million dollars or more has more than doubled in the past five years. High interest rates and prices are pushing home ownership out of reach for middle-income households.
According to RNZ Business, the number of New Zealand mortgages with a balance of one million New Zealand dollars or more has risen from about 11,000 to over 25,000 in the past five years. With average home prices remaining elevated in major cities led by Auckland, buyers are turning to longer-term loans and larger deposits. Bank analysts say the trend could deepen generational wealth inequality.
The Reserve Bank of New Zealand's benchmark rate stands at 5.25%. The 30-year mortgage rate is around 6.8%, meaning the monthly payment for a household with a million-dollar loan is roughly 6,500 dollars. Independent analysts say full-time work by two adults has become essentially mandatory for families to service the debt.
The government is considering a first-home-buyer incentive package at the cabinet table. Economists warn, however, that demand-side support without serious supply reform could push prices higher still. Housing accounts for more than half of New Zealand's total personal debt stock.
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