Such households now may be much less well placed to cope with the unexpected than others in their position once were. The high level of borrowing by New Zealand households is also reflected in data on household leverage - that is, the ratio of household debt to the value of the house.
The leverage ratio has drifted upwards in the last 20 years or so, from 15 to 20 per cent in the mid 1980s to around 30 per cent today. Australia and the US have seen similar trends.