A decline in New Zealanders' wealth was a standout in the annual UBS-Credit Suisse Global Wealth Report, partially reversing the previous year's significant increase.
Among the 60 countries with the highest wealth per adult in the report, NZ recorded the second biggest dollar value drop in both mean and median wealth.
NZ's mean wealth per adult for 2022 fell US$67,420 year-on-year to US$388,760, placing it sixth down from fifth. NZ's median wealth per adult for 2022 fell US$30,640 to US$193,060, placing the country fourth down from third. (See more in the tables and chart lower down this story).
Last year's report, featuring 2021 figures, noted the NZ dollar had appreciated 8.8% against the US dollar. This, along with "rapidly rising house prices" helped NZ's mean wealth per adult increase US$114,289, or 32%, to US$472,150. This year's report has NZ house prices down 9% in 2022.
The authors note 2022 recorded the first fall in net global household wealth since the Global Financial Crisis of 2008.
"Measured in current nominal US dollars, total net private wealth fell by US$11.3 trillion (–2.4%) to US$454.4 trillion at the end of the year. Wealth per adult also declined by US$3,198 (–3.6%) to reach US$84,718 per adult at end-2022," the report says.
"Much of this decline comes from the appreciation of the US dollar against many other currencies. If exchange rates are held constant at 2021 rates, then total wealth increased by 3.4% and wealth per adult by 2.2% during 2022. This is still the slowest increase of wealth at constant exchange rates since 2008. Keeping exchange rates constant but counting the effects of inflation results in a real wealth loss of –2.6% in 2022."
They also say overall wealth inequality fell a little in 2022, with the wealth share of the global top 1% falling to 44.5% from 45.6%. The number of US dollar millionaires worldwide fell by 3.5 million during 2022 to 59.4 million people. The authors say, however, this is before taking into account 4.4 million "inflation millionaires" who would no longer qualify if the millionaire threshold were adjusted for inflation in 2022.
"Global median wealth, arguably a more meaningful indicator of how the typical person is faring, did in fact rise by 3% in 2022 in contrast to the 3.6% fall in wealth per adult. For the world as a whole, median wealth has increased five-fold this century at roughly double the pace of wealth per adult, largely due to the rapid wealth growth in China."
The authors say according to their projections, global wealth will rise 38% over the next five years, reaching US$629 trillion by 2027. They say growth in middle-income countries will be the primary driver of global trends.
"We estimate wealth per adult to reach US$110,270 in 2027 and the number of millionaires to reach 86 million while the number of ultra-high-net-worth individuals is likely to rise to 372,000 individuals."
The 2023 edition is the fourteenth edition of the Global Wealth Report. Previously issued by Credit Suisse, it's now in the name of both Credit Suisse and UBS, following the acquisition of Credit Suisse by UBS. According to the authors, the report explores how wealth is created, how it varies across regions globally, and how it transforms, evolves, and migrates across generations.
Net worth or "wealth" is defined in the report as the value of financial assets plus real assets, primarily housing, owned by households, minus their debts. Private pension fund assets are included, but not entitlements to state pensions. Human capital is excluded, plus state-owned assets and debts. Valuations refer to year-end values and are usually expressed in terms of US dollars using end-of-period exchange rates.
UBS and Credit Suisse say the selection of countries in the report is heavily constrained by the availability of reliable data.
"For the most part, we confine attention to markets that have official balance sheet data. Most of these markets have reported figures for the total financial wealth and debts of households at the end of 2022, and often total non-financial wealth as well. Typically, the same markets have share price and house price series covering most, or all, of 2022, which helps to fill any gaps."
"Some markets do not meet our target standards. Brazil is one example. But it is difficult to review household wealth experiences in Latin America without reference to its largest economy. Even less is known about Nigeria. However, in the absence of an obvious alternative, we chose it to partner South Africa in order to give some idea of developments in Africa," the authors say.
"The paucity of data sources makes it difficult to review household wealth developments in the Middle East, North Africa region. However, given the importance of the region, we have used the available information to provide wealth estimates for Saudi Arabia and the United Arab Emirates which may help in understanding how the level and distribution of household wealth has evolved since the year 2000."
Total NZ wealth was estimated at US$1.4 trillion.
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36 Comments
Depends where you're talking about. Property prices in some areas of Auckland have been booming until recently, people have made fortunes if they got it right. The last house I sold I got $2m more than I paid for it...tax free.
Now's a great time to look for that next property.
Article in the newspaper a few years ago now, was pretty shocking reading at the time. I would guess that you only need about millions dollars now of individual net wealth to be in the top 5% of New Zealanders. Someone should do an update here on interest.co.nz, it would really surprise most people and really highlight the debt level out there. Plenty of people out there living the multi-millionaire lifestyle, its just they don't actually own anything.
A high-net-worth individual is one with liquid assets of at least $1 million. The threshold generally uses liquid assets only — money held in bank accounts or brokerages — excluding assets like a primary residence, collectibles or durable goods. Details here.
Global HNWI population fell by, 3.3% in 2022, to 21.7 million.
Or if you're interested in the UBS report you could read the story above which says;
Net worth or "wealth" is defined in the report as the value of financial assets plus real assets, primarily housing, owned by households, minus their debts. Private pension fund assets are included, but not entitlements to state pensions. Human capital is excluded, plus state-owned assets and debts. Valuations refer to year-end values and are usually expressed in terms of US dollars using end-of-period exchange rates.
Agreed however the Aussies have, at the very least, material wealth to physically the realise the wealth creation. NZ twiddles numbers and watches (historically) capital gains grow whole calling it hard work and wealth creation. Anyone see Blackrock pulling from the US? Big implications there
To be honest, I was in the UK 2 weeks ago and the so called inflation hitting the cost of living was nothing like I was lead to believe. It still seems relatively cheaper than NZ on most fronts and the tourism is booming again, fuelling the housing market for those looking to Airbnb places. People barely mention the cost of living, everyone is just going about their business. NZ seems captivated in their own doom cycle from the outside
And yvil not bad for the last country to be settled wether Maori or Brit . And the last country to becom a industrial country pretty good for say 200 yrs. Meanwhile places like UK and Europe economies have been going alot longer than ours yet we beat ourselves up and compare ourselves against them.
Can report from Budapest, Hungary. I can report prices for food is up around 2-3x since 2016 when O was last here. Talked to some locals around the subject and They said it is all the inflation since covid but wages are not up at all so they are struggling. Yet I saw large scale gentrification and young people pit and about living it up, plenty of boutique places to eat or have a beer. Not sure what to make of it
According to this distribution release, the upper quintile (top 20%) had median wealth of about $2M NZD in 2021.
Based on another graph in that page the top 1% have about 16% of NZ's wealth, and the total wealth of $1.4T USD reported in this article, the top 1% have an average wealth of around $7M NZD. That's actually less than I would have thought.
According to this distribution release, the upper quintile (top 20%) had median wealth of about $2M NZD in 2021.
Which is not that high really if you strip out the house and assuming that the upper quintile occupy the higher priced houses.
https://www.stats.govt.nz/experimental/how-wealthy-am-i/
From 2019, but still somewhat relevant. Net wealth of $1.25m puts you in the top 16.7%. Around ~$500k are you are in the top 40%.
Property's always a pretty good bet. Those that are about to retire may have 'invested' their funds in the 1980's stock market which crashed, eviscerating portfolios, and impoverishing many. A significant number of those companies ended up worthless.
If they'd bought a house in the 1980's, they'd be sitting on a tidy sum, if they'd cared for it and rented it out.
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