tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 29th, 10:40AM

Investments

rss
Investment News

Research: Household net worth stagnates

The net worth of New Zealand households has effectively stagnated over the past 15 months, according to the latest WestpacTrust Household Savings Indicators.

Sunday, December 12th 1999, 12:00AM

by Philip Macalister

The net worth of New Zealand households has effectively stagnated over the past 15 months, according to the latest WestpacTrust Household Savings Indicators.

 

Over the latest quarter ended September 1999, New Zealand household net worth fell by
$1.8 billion (-0.7 per cent), the second consecutive quarterly decline. Aggregate net worth now stands at an estimated $253 billion, around the same level of total net wealth owned by households at the end of June 1998. Financial net worth, which excludes housing assets and liabilities, was again unchanged at around $97 billion. Financial net worth represents some 38 per cent of total net worth which includes housing assets and liabilities.

-

Source: Morningstar and NZIER Estimates

Households’ liabilities rose by almost $1.5 billion (2.3 per cent), the fourth consecutive quarterly increase of this magnitude. The annual growth in liabilities was $6.3 billion or 10.8 per cent, a return to the double digit growth that persisted through 1994 to 1997.

"New Zealand households have continued to borrow heavily during the latest quarter in order to finance houses (and other) purchases," NZIER director Alex Sundakov says.

The detrimental effect of increased liabilities on total household net worth was reinforced by the overall decline in the value of assets. Housing stock in particular experienced the largest decline, falling an estimated $400 million (-0.2%), partly as a result of the negative effects of depreciation. Assets to show increases in value included deposits at financial institutions (up $200 million) and managed funds (up $137 million). Over the year, managed fund assets have continued to show the most significant growth, rising in value by $3.1 billion or 9.1 per cent. By comparison, the amount of deposits and cash held at financial institutions has fallen by
$85 million over the year.

"We are seeing further evidence of the impact of the changing economic environment on household behaviour," WestpacTrust Financial Services general manager Girol Karacaoglu says. "Higher levels of consumer confidence, combined with lower interest rates, are continuing to cause households to significantly alter the mix of their savings and investments, as well as make more use of available credit."

Net new flows into managed funds, whilst still positive in the latest quarter, also showed signs of stagnation.

« How to avoid the 39 cent tax rateKing builds an empire »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend

Good Returns Investment Centre is brought to you by:

Subscribe Now

Keep up to date with the latest investment news
Subscribe to our newsletter today

Edison Investment Research
  • Electra Private Equity
    27 September 2021
    Introducing Hostmore and Unbound brands
    On 16 September, Electra Private Equity (ELTA) issued a trading update for its largest remaining hospitality brands, Fridays and 63rd+1st, and named the...
  • European Assets Trust
    21 September 2021
    Performance, income and a well-balanced portfolio
    European Assets Trust (EAT) aims to achieve long-term growth of capital through investments in smaller European companies (excluding the UK). EAT’s...
  • Georgia Capital
    13 September 2021
    Value creation on the back of macro recovery
    Georgia Capital (GCAP) posted a 13.2% NAV total return (TR) in local currency terms in H121 (15.2% in sterling), driven by an improved operating performance...
© 2024 Edison Investment Research.

View more research papers »

Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com