The value of Kiwis' property dropped again in the March quarter, but a rise in pension asset values helped drive an overall increase in household net worth of over $7.8 billion.
According to Statistics NZ household wealth figures our net worth as at the end of the March quarter 2024 was $2.342 trillion, up from 2.334 trillion in December.
The rise comes despite house and land values doing another u-turn in the quarter and falling again, to a little under $1.197 trillion from nearly $1.199 trillion in December - a fall of $2.019 billion.
This drop in the value of household land and property values follows rises of nearly $43 billion across the previous two quarters. But those gains followed some $146 billion worth of falls across six quarters from late 2021 onwards.
However, as said above, our overall net worth did increase in the March quarter for the third consecutive quarter after having fallen (on the back of the falling housing values) for six consecutive quarters.
Stats NZ said the total value of insurance and pension assets of households rose $8.3 billion (5.5%) to over $160 billion, following a $6.2 billion (4.3%) rise in the previous quarter.
In the year ended March 2024, household insurance and pension assets rose just over 10%.
“Superannuation funds such as KiwiSaver comprise the large majority of household insurance and pension assets,” Stats NZ's national accounts institutional sectors senior manager Paul Pascoe said.
“These funds are invested in local and global equities which can be quite volatile, and in this quarter led an increase in household wealth.”
Stats NZ said household saving remained in the negatives where it has been since 2022, but did improve.
Household saving rose from -$1.2 billion in the March 2023 year to -$17 million in the March 2024 year. Household net disposable income increased by 6.2% during the year, while household spending rose at a slower rate of 5.6% in current price terms.
During the March 2024 quarter, household net disposable income increased by $1.4 billion (2.3%) to $59.8 billion. The increase in net disposable income was driven by compensation of employees (up $1.0 billion), social assistance benefits in cash (up $313 million), and interest earned by households from their investments (up $163 million). These increases were slightly offset by a $58 million fall in dividends received by households.
Total income payable rose $315 million (1.2%) to $25.6 billion. The leading contributors were a $112 million increase in interest paid by households and a $75 million increase to pension fund contributions.
3 Comments
According to Statistics NZ household wealth figures our net worth as at the end of the March quarter 2024 was $2.342 trillion, up from 2.334 trillion in December.
Market capitalization isn’t “wealth.” It’s the latest price, times shares outstanding. Blotches of ink on paper. Flashing pixels on a screen. If a dentist in Poughkeepsie buys a single share of Apple at a price that’s 10 cents higher than the previous trade, $1.6 billion in market capitalization emerges from thin air. If a single share trades 10 cents lower, $1.6 billion evaporates just as quickly. Whatever happens, every security in existence has to be held by someone until it is retired. Ultimately, the wealth inherent in a security is the future stream of cash flows it will deliver to its holder(s) over time. Price fluctuations don’t change those underlying cash flows. They just provide opportunities for the transfer of savings between investors. High valuations favor the sellers. Low valuations favor the buyers. Investors have never paid higher prices for those future cash flows, or accepted prospective returns so low.
Put simply, the bubble hasn’t changed the wealth, and a collapse won’t change the wealth. What will change is the market cap. I suspect that the erasure of market cap in the coming years, and possibly the coming quarters, may be brutal. Still, no forecasts are required, and our own attention will remain on observable valuations, market internals, and other factors. Meanwhile, even if an investor sells at these extremes, the only thing that will change is who holds the bag. Link
We went from worshipping mystical deities to worshipping mystical numbers.
Up $43B down $146B... magically appearing, magically disappearing. Hundreds, thousands, millions, billions, trillions... is just the tokens decreasing in value and requiring larger numbers to quantify what?
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.