Net worth

Household net worth continues its upward trend

Household net worth for September 2021 rose $479 billion from September a year earlier, according to New Zealand statistical data.

The strongest quarterly increases started in June 2020 and peaked in March 2021. This period was after the longest lockdown (March-May 2020) but before our last round of lockdowns.

The level of quarterly variation is represented by the yellow line in the chart below:

Household net worth is calculated as the value of financial (stocks, bank deposits, etc.) and non-financial (real estate, vehicles, etc.) assets owned by a household, minus its liabilities, including mortgages.

The strong growth in the March 2021 quarter, a jump of $207 billion (9%) from the previous quarter, was attributable to a strong real estate market adding value to the household total and then declining in the following months.

In the June and September quarters of 2021, growth was comparatively more modest, increasing by around $60 billion each time.

“While household net worth continues to grow, the pace has slowed since the March 2021 quarter, which saw an increase of $207 billion or 9.6%,” said Paul Pascoe, chief information officer at the institutional sector of national accounts at Statistics NZ.

With Covid-19 reducing business and retail spending opportunities in 2021, money was flying into, rather than out of, the household kitty.

It was a positive year for household savings, which totaled $3.85 billion in the September 2021 quarter, compared to $2.67 billion in September 2020.

Statistics NZ pointed out that the savings level in the September quarter was the second highest quarterly figure on record since the start of the time series in June 2016.

The highest saving value was $7.2 billion in the June 2020 quarter, which was also impacted by a Covid-19 alert level 4 lockdown.