MIL-OSI Submissions: Property assets and debt drive changes in wealth – Stats NZ Media and Information Release: Household net worth statistics: Year ended June 2018

Property assets and debt drive changes in wealth – 14 December 2018

For typical households owning the home they live in, the value of their home rose almost $100,000 over the last three years, Stats NZ said today.

Median property assets for people’s homes were up from $350,000 in the year ended June 2015 to $448,000 in 2018. Household debt associated with our homes also increased. Median property debt for people’s homes increased from $172,000 to $206,000 (up $34,000) over the three years.

“Because many people’s main asset is the house they live in, changes to the value of residential property has a big impact on household net worth,” labour market and household statistics senior manager Jason Attewell said.

Net worth measures the value of all the assets a household owns, including property and savings, less all the debts, such as mortgages and credit card debt.

The median value of household assets increased from $400,000 to $496,000 (up 24 percent) in the three years to June 2018. During the same period, household debt remained unchanged at about $42,000 in the year to June 2018, and household net worth rose 18 percent, to a median net worth of $340,000.

For most households, the amount of property debt for each dollar of property asset held remained stable or reduced over the three years to June 2018. However, for households in the lowest 20 percent of the net worth distribution, the debt per dollar of asset, specifically for the home they live in, increased from $1.10 of debt to $1.75.

image

“While the amount of debt a household holds is important, for wealth, it’s the size of the debt in relation to the size of the assets that determines a household’s net worth. Households with the lowest net worth now have more debt per dollar of asset in the house they live in than three years ago,” Mr Attewell said.

These latest statistics, gathered from the Household Economic Survey (HES), help describe the net worth of New Zealand households in the year ended June 2018. Net worth statistics are a key indicator of the economic well-being of New Zealanders – for example, they provide information on wealth inequality and how prepared New Zealanders are for retirement. We collect information about net worth every three years.

HES is not designed to measure total wealth but helps to understand the distribution of net worth across the population.

Annual balance sheets: 2017 (provisional) released on 10 December 2018 provides a measure of total household net worth.

MIL OSI

MIL-OSI Submissions: Wealth of top 20 percent rises by $394,000 – Stats NZ Information Release: Household net worth statistics: Year ended June 2018

Wealth of top 20 percent rises by $394,000 – 14 December 2018

The net worth of the richest 20 percent of New Zealand households has risen $394,000 since 2015, to reach a median of $1.75 million, Stats NZ said today.

Over the same period, from the year ended June 2015 to the June 2018 year, the net worth of the bottom 40 percent has not increased.

The median net worth of the typical Kiwi household in the June 2018 year was $340,000, up from $289,000 three years ago – mainly reflecting rising property values. The median means half of all households are richer and half are poorer than this value.

“The median net worth of the top 20 percent of surveyed New Zealand households has increased about $131,000 a year. This equates to almost $360 every day for the past three years,” labour market and households senior manager Jason Attewell said.

“Household net worth in New Zealand is concentrated in the top 20 percent of Kiwi households surveyed in the past year. That group collectively holds about 70 percent of total household net worth. These net worth statistics tell us that wealth is unevenly distributed across the population, and this is unchanged from three years ago.”

image

In the second survey of net worth, Stats NZ asked thousands of households about the assets they own, including homes, shares, and bank deposits, and the money they owe, such as mortgages and credit card debt. The balance between the two sides of the ledger is their net worth.

“This information is important because it can show how well households are prepared for retirement, or how well they can weather a financial storm, such as losing their job,” Mr Attewell said.

In the June 2018 year, compared with three years earlier, 55 percent more households had a net worth of more than $1.50 million.

“However, we also know the survey may not gain a representative picture of a small number of the extremely rich,” Mr Attewell said.

image

Half of all households held 94 percent of New Zealand’s net worth. This is very similar to the distribution in 2015, when it was 93 percent.

New Zealanders’ individual net worth increased with age until around retirement. People tend to build net worth throughout their lives. In 2018, young people (15–24 years) had the lowest median individual net worth ($2,000); people of traditional retirement age (65–74 years) had the highest ($416,000).

The household economic survey is not designed to measure total wealth but helps to understand the distribution of net worth across the population.

Annual balance sheets: 2017 (provisional), released on 10 December 2018, provides a measure of total household net worth.

Video

See the Household net worth statistics: Year ended June 2018 video.

For more information about these statistics:

MIL OSI