Kiwi home buyers pay more for their mortgages than most of the rest of the world.
Mortgage interest rates have gone up in response to the Reserve Bank raising the Official Cash Rate to 2.75 per cent last week. But they have been high relative to the rest of the OECD for 20 years.
Across the Tasman, interest rates are often considerably lower than in New Zealand.
The price of a house in Belmont, Perth, compared with Belmont, Lower Hutt, may be about the same, but Kiwis end up paying more for their money.
This week, ANZ offered a floating rate of 5.88 per cent in Australia and a fixed two-year rate of 4.99 per cent.
In New Zealand, the same bank offers its floating rate at 5.99 per cent and a fixed rate of 6.29 per cent.
ASB offers a two-year fixed rate of 6.29 per cent. Its Australian parent, Commonwealth Bank, offers the same term for 4.99 per cent. That means the Kiwi ASB customer pays $629 interest per year for every $10,000 they borrow, while an Aussie with Commonwealth pays the equivalent of about NZ$529.
On the surface, there does not seem to be a reason why Kiwis should pay more than other countries, regardless of global economic conditions.
Occasionally, rates in Australia exceed those in New Zealand, but it is usually cheaper to get money across the Tasman.
A 2010 paper by the Treasury suggested the difference was due to New Zealand's low level of household saving compared with overseas.
Less saving meant banks had to borrow from overseas to make up for the lack of domestic funds, and that cost was passed on.
Previously, the difference has been blamed on the volatility of the New Zealand dollar, the small size of the market, and the risk of New Zealand defaulting on its loans.
The value of the goods and services New Zealand imports has been higher than what it exports for more than 40 years, creating a persistent "current account deficit" in the economy.
Massey University banking studies associate professor David Tripe said the only way to reverse the situation would be to completely overhaul the economy, which was easier said than done.
"We need more savings, less spending and possibly less spending on houses," he said. "We invest in housing, rather than assets which are actually productive."
Despite this, it was likely housing would remain the preferred investment of most people, he said.
However, Westpac chief economist Dominick Stephens said saving was "not necessarily a slam dunk explanation" for the higher mortgage rates.
Australia had a current account deficit, on average larger than New Zealand's, for much of the last 20 years.
"It doesn't really matter what the domestic savings rate is if you can suck in savings from overseas," he said. "The explanation lies in the willingness of foreign investors to lend to us."
He blamed reluctance to do so on the vulnerability of the New Zealand economy. "We are a less diversified economy, and they perceive a greater risk we will default, or the value of the dollar will plunge."
- The Dominion Post