The housing boom has left the average household about $60,000 richer than it was two years ago, with a net worth of $235,329.
Spicers' Household Savings Indicators quarterly survey said households collectively had assets of $478 billion at the end of last year, against debts of $120 billion.
But households
are piling on new debt faster than asset values are rising. In the last three months of 2004, the value of the housing stock rose 2.9 per cent and all household assets rose 2.7 per cent, but debt rose 3.7 per cent.
Over the whole of 2004, households' assets rose 12 per cent or $51 billion, with $44 billion of that a rise in the housing stock.
Financial assets such as superannuation and bank deposits rose just 6.1 per cent or $7.1 billion.
But household debt rose 14.9 per cent or $15.5 billion last year. As a result, interest bills are rising - in dollar terms and as a share of household incomes.
Debt servicing costs take a bigger bite out of incomes than at any time in the past 15 years and are higher than in Australia or Britain.
Spicers economist Rozanna Wozniak said interest rates might rise further, which would increase debt-servicing costs.
"It's so much easier to take on debt than it used to be."
Collectively, households spend more than they earn and that trend has been getting worse. The confidence to borrow for consumption spending reflects the "wealth effect" of rising house prices.
Wozniak said the pace at which house prices were rising had slowed significantly over the past year.
It has stalled altogether in central Auckland, Nelson and Queenstown,
She said with factors like dwindling net immigration flows pointing to a further slowing in house price growth, consumers needed to be more careful about adding to debt.
Deeper pockets
* Rising house prices have boosted household worth.
* But people are borrowing more as they are feeling wealthier.
* The average household now has a net worth of about $235,000.
