“The average public debt ratio to GDP for advanced economies is about 110% or so, and New Zealand’s is less than half of that,” Specht said.
Financial stability underpins AAA confidence
Morningstar DBRS said New Zealand’s financial system has weathered recent housing corrections well, thanks to robust capital levels and responsible lending standards.
“A lot of that is due to the well-capitalised banks that are also very liquid, and they have strong buffers to absorb losses,” Specht said.
Loan-to-value (LVR) and debt-to-income (DTI) restrictions have also contained riskier lending. While overdue loans have edged up amid softer economic conditions, non-performing loans remain low, and stabilising house prices have eased risks to financial stability, RNZ reported.
What it means for mortgage advisers
For mortgage advisers, New Zealand’s AAA rating reinforces confidence in the nation’s lending system and property market stability, supporting more positive credit conditions heading into 2026.