Our net worth has increased for the first time since late 2021, while we are still steadily saving some money even in the face of high inflation.
The latest household net worth figures from Stats NZ show that in the September 2023 quarter we managed to eek out a $5.3 billion increase in net worth - which was the first increase since December 2021.
And despite increasing costs, disposable income remained ahead of outgoings, enabling a small amount of savings to be made. After total household expenditure exceeded net disposable income in each of the December 2022 and March 2023 quarters, the last two quarters have now seen disposable income outstripping expenditure - albeit not by much.
Going back to the increase in overall household net worth, this has come as house prices begin to recover.
Prior to the September quarter, the household net worth had fallen by over $200 billion (just over 8%) from the December quarter 2021 onwards - but that of course followed a period of very hefty gains prior to that. In the 2021 calendar year, for example there was a net gain of nearly $472 billion.
In the September quarter housing and land value increased by over $2.3 billion (0.2%) to $1158 billion. Before the latest quarter there had been six consecutive quarters of falls, with the total value having dropped by over $146 billion (11.2%)
Stats NZ's national accounts industry and production senior manager Ruvani Ratnayake said the September 2023 quarter increase in household net worth "reflects a rise in property values for both homeowners and landlords".
"The result compares to an average quarterly decline in household net worth of 1.4%, or $33.6 billion, over the previous six quarters.”
The grand total for net household worth at at September 2023 was $2292.5 billion, which was an increase of 0.2% on the value for the June quarter. The peak level in December 2021 was a worth of $2488.8 billion.
Stats NZ said (as already mentioned higher up the article) that 'household non-financial assets' (which include buildings and land) increased $2.3 billion this quarter, following falls in the previous six quarters.
Household financial assets also grew, up $5.3 billion, after falling in the previous two quarters. The increase was mainly due to currency and deposits, up $4.2 billion, while equity rose $2.7 billion. Household equity includes the value of rental properties less the associated mortgages held against them.
Offsetting these increases in financial assets was a $1.6 billion fall in insurance and pensions this quarter. The last time pensions fell was back in the June 2022 quarter.
In terms of household savings, Stats NZ said Kiwi households saved $856 million in the September 2023 quarter, relatively unchanged from June 2023 quarter levels.
"The household sector maintained its level of saving in the September 2023 quarter, with rising household incomes keeping pace with increased household spending," Ratnayake said.
Household net disposable income increased by 0.5% to $59.2 billion in the September quarter, while household spending increased by 0.5% to $58.3 billion. The increase in household spending was driven by price increases, as the volume of goods and services consumed by households fell 0.6 percent in the September quarter.
The household saving ratio, which compares household saving to net disposable income, remained at 1.4% in the September 2023 quarter.
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 payable) have been accounted for. It represents the money available for a household to save, invest, or spend.
Total income receivable increased by $1.5 billion for the September 2023 quarter. This was driven largely by a 2.2% increase in compensation of employees, consistent with an increase in average weekly earnings and ordinary time hourly earnings.
Household income payable rose by $1.2 billion to $23.9 billion (an increase of 5.1%) driven by income tax and interest payable. Income tax payable increased 5.5% to $14.8 billion, and interest payable rose 8.2% to $3.2 billion. All the percentage increases are compared with the June quarter 2023.
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