The wealth of Kiwi households is taking a bit of bruising, particularly from falling house and land values - but savings rates are proving remarkably resilient in the face of high inflation.
On the latter point, it is significant to note that the disposable incomes of Kiwi households actually rose at a faster rate in the December quarter than the rate of spending - in other words income increases were outstripping inflation.
According to new data from Stats NZ, the value of owner-occupied properties fell during 2022 (year to December) by $93.2 billion (about 7%) to $1,232 billion. The rate of decline did actually slow during the last quarter of the year, however (down about $12.3 billion).
In total there was an annual fall of $176 billion, or 7.3%, in the total net worth of Kiwi households to $2,251 billion from the peak in December 2021, according to Stats NZ's national accounts institutional sectors senior manager Paul Pascoe.
"The total net worth of households was $2,251 billion in December 2022."
On the savings situation, Pascoe said New Zealand household saving was $2.1 billion in the December 2022 quarter, the same level as in the September quarter but well above pre-pandemic levels.
Household net disposable income increased by 1.8% to $57.4 billion in the December 2022 quarter, while household spending increased by 1.7% to $55.3 billion.
Pascoe said the increase in household spending largely reflected price increases, as there was little change in the volume of goods and services consumed by households during the December 2022 quarter.
"The total disposable income of New Zealand households increased at a slightly higher pace than the rise in living costs."
Stats NZ describes household net disposable income is the amount of money a household has once all income receivable (such as wages, interest earned, and child support) and income payable (such as taxes and interest paid) have been accounted for. It represents the money available for a household to save, invest, or spend.
During the quarter household income receivable rose $2.1 billion to $80.2 billion (2.6%), driven by interest received on bank deposits (up 28.2%), salaries and wages (up 1.2%), and dividends (up 37.8%).
Household income payable rose $1.1 billion to $23.1 billion (4.9%), driven by interest payable and income tax. Interest payable rose 23.9% reflecting increasing interest rates on housing loans during the quarter, while income tax paid increased by 3.4% aligned with the continued growth in salary and wages'
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