Household net worth for September 2021 was up $479 billion compared to September the previous year, says Statistics NZ data.
The steepest quarterly increases started in June 2020 and peaked in March 2021. This period was after the longest lockdown (March-May 2020) but before our most recent round of lockdowns.
The level of quarterly change is represented by the yellow line in the graph below:
Household net worth is calculated as the value of both financial (stocks, bank deposits etc.) and non-financial assets (real estate, vehicles etc.) owned by a household, less its liabilities including mortgages.
The high growth in the March 2021 quarter, a leap of $207 billion (9%) on the quarter before, was attributable to a strong property market adding value to the household total, then tapering off in the succeeding months.
During the June and September 2021 quarters, growth was comparatively more modest, creeping up by around $60bn each time.
“While household net worth continues to grow, the pace has slowed since the March 2021 quarter, which recorded an increase of $207 billion or 9.6 percent,” said Paul Pascoe, national accounts institutional sector insights senior manager at Statistics NZ.
With Covid-19 reducing business and retail spending opportunities during 2021, money was flying into, rather than out of, the household kitty.
It was a positive year for household saving, which totaled $3.85 billion in the September 2021 quarter, compared to $2.67 billion in September 2020.
Statistics NZ pointed out that the level of savings in the September quarter was the second highest quarterly figure on record since the timeseries began in June 2016.
The highest saving value was $7.2 billion in the June 2020 quarter, which was also impacted by a Covid-19 alert level 4 lockdown.
18 Comments
Meanwhile all my other productive asset classes continue to drop. Property is the only thing going up and everything else is going down. I am a sucker for contributing to the community by starting businesses that employ people. I should have just joined the property cult instead with that money and been a slum Lord.
But when you look back sometime in the future Colmolo you'll be glad you didn't. I am retired and don't have nearly as much money as I could have had if I'd got into property investment. Yet when I look back at the consequences for young people starting out now I am so glad I wasn't part of that.
NZ needs people like you, and desperately so.
Please do not join the housing specuvestor parasites. And once the interest rates normalization process really starts kicking in, you will see the NZ housing Ponzi drop like a stone. Sooner or later, economic fundamentals reassert themselves, regardless of the cheating game played by the RBNZ -a game that they can't play for much longer, with inflation threatening to get out of control.
I’ve owned property for over 50 years. In one year a long time ago prices doubled in one year and everybody said when interest rates rise prices will drop like a stone. Well I’m still waiting and prices have gone from $10K to $1m. Lucky I never listened to people like you every time they said the same as you!
Household net worth continues upward trend
What else do you expect Toby Allen, if house prices jumps 30% - 70% annually.
Toby, your headline should be : Net worth continues upward for those who own house and down for those who are not in property ladder - Inequality increases.
But you choose to go with Glass Half Full ignoring the empty side.
Someone finally did a net wealth article, shame however it was not broken down to actual individual numbers it would have been quite interesting to see how much it has increased since the NZ Herald article a few years ago now. Has probably not gone up significantly for most, just more and more people without property, however for the top 1% it would have gone up like a skyrocket.
No PDK, lets keep it simple its just numbers you can easily calculate for yourself in dollar terms. Lets not worry about the energy side of the equation, nobody really knows the future on this. Energy still has a price and if things get really bad only the rich will be able to turn their lights on.
The issue at hand, is that currently you require those digits in order to acquire real things.
I would argue the sooner you conver those digit into viable long term assets (Land, shelter, food, skills, and energy conversion (i.e. solar/micro hydro/etc...) the better.
I think self-sustainability is moving from a "lifestyle" to life. It's just a matter of time.
The highest saving value was $7.2 billion in the June 2020 quarter, which was also impacted by a Covid-19 alert level 4 lockdown.
The savings will erode quickly as inflation continue to ramp up.
It is irrational to hold a bunch of savings to see it withers away in value because of rising prices.
It would be better off to invest in hard assets such as real estate to hold or grow the savings.
If our net worth has increased, what additional goods and services were produced to create this extra wealth? Or did we produce the same output more efficently?
Or... did out net worth not increase at all.
With the 'increased' net worth we collectivly have now, what additional things can be purchased?
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