New data from the Reserve Bank of New Zealand (RBNZ) reveals that the proportion of new mortgages taken out with debt-to-income (DTI) ratios above five soared in the December quarter, with all borrower groups rising:
New Zealand DTIs have risen significantly as property prices surged.
Auckland home buyers in general are far more leveraged than New Zealanders as a whole.
Nearly two thirds (64.8%) of first home buyers (FHBs) in Auckland took out mortgages with DTIs above five. This compares to just under half of first-home buyers (48.8%) nationally.
In a similar vein, well over half (57.2%) of Auckland owner occupiers (not including FHBs) took out mortgages with DTIs over five over the December quarter. This compares to 31.5% nationally.
There have been calls for the RBNZ to impose DTI restrictions to curb the property market. Doing so would disproportionately impact FHBs and Aucklanders.
