Feeling Wealthier? Here’s How Much Household Net Worth Has Lifted

Susan
Edmunds, Money Correspondent

New Zealand
households are now 33 percent richer than they were in 2021,
Stats NZ says.

But the increase has not been felt by
everyone.

Stats NZ released its latest household net
worth data for the three years to June 2024.

It shows
the median net worth of households had reached $529,000,
compared to $399,000 in June 2021.

This is calculated
by taking the value of household assets such as housing,
retirement savings and other investments, and subtracting
debt.

Stats NZ said the median increase was driven by
a lift in the value of real estate.

House prices boomed post-Covid but
have been on a steadily declining track
since.

Owner-occupied housing and other real estate
was just under half of all household assets in the year to
June las year.

Infometrics chief executive Brad Olsen
said the timing of the data removed some of the pandemic
housing market swings.

“The year ending June 2021
really comes just before you saw a lot of that big pickup in
the housing market.

“On average you’re going to be
seeing activity that was happening more sort of the end of
2020 before you saw house prices that really hit their peaks
towards the end of 2021, start of 2022.

“And so
looking through all of those figures you had during those
periods about a 30 percent pickup at some points in house
prices.

“Given you’ve seen house prices that have then
pulled back – let’s call it 20 percent just to keep the
numbers round, you’re still seeing a good uplift in the
value of houses.”

New Zealand’s wealthiest 20 percent
of households had their wealth increase by 24 percent in the
period, to a median $2.4 million.

The median net worth
of households in the two quintiles below the top increased
by 40 percent, to $500,000 and $1 million,
respectively.

But Stats NZ said there was no
statistically significant change in the two lowest income
groups.

“In the year ended June 2024, the wealthiest
20 percent of households held approximately two-thirds of
New Zealand’s total household net worth,” household
financial statistics spokesperson Chris Pooch
said.

“This reflects an uneven distribution of wealth
in the country.”

Individual net worth increased with
age.

Those aged 15 to 24 had the lowest median, at
$4000.

People aged 75 and over had the highest median,
at $590,000.

After standardising for the different age
profiles, Europeans had the highest median individual net
worth at $222,000 up 44 percent from the year to
2021.

Māori had a median net worth of $52,000 which
was no statistically significant change from 2023 and
Pacific People had median net worth of $26,000.

The
top 1 percent now hold 14.1 percent, which was slightly down
on previous years.

The top 10 and 5 percent also hold
slightly less of the wealth overall, but the top 50 percent
is relatively constant.

Westpac senior economist
Satish Ranchhod said that was an interesting development for
the economy.

He said the lower net worth quintiles
were where increases were typically slower.

“Those
will often be people who are earlier on in their working
careers as well and they wouldn’t have had the chance at
this stage to have built up a wealth level.”

He said
it was interesting that the upper quintile had more of their
wealth in assets outside real estate.

“Even as we’ve
moved beyond the statistics of 2024, the lower interest
rates we’ve had over the past year will certainly be adding
to that wealth portfolio for a lot of them.”

Olsen
said it was likely that household wealth would continue to
increase over coming years, but potentially at a slower pace
than when house prices were booming. “I think there’s just a
bit of general consolidation going on,:”

A third of
households reported receiving an inheritance.

The
median net worth of those households was
$984,000.

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