$37,000 net gain for homeowners
Property was the main driver as homeowners reaped a $37,000 gain in their net average worth last year, according to the latest Spicers Household Savings Indicators survey. The net worth of the average household has reached $326,000, including a $10,000 rise in the December quarter. Rising house prices accounted for most of the increase, with the value of the housing stock rising 4.3% in th
Monday, March 20th 2006, 12:00AM
by The Landlord
e quarter."There is little doubt that most New Zealanders who own residential property have been laughing all the way to the bank," chief economist Rozanna Wozniak said.
Higher housing values were providing consumers with a false sense of security., she said. "Most of our wealth is tied up in owner-occupied housing and can't be easily unlocked in retirement."
If housing was removed from the calculations, net worth for the average household rose just $7800 for the year and $1600 for the quarter.
The financial net worth, including assets except housing, increased just 0.5% during the quarter and 4.8% for the year.
Despite negative signals Ms Wozniak said the economy would not crash and the forecast 5% to 10% decline in house prices would still leave most homeowners significantly better off, Ms Wozniak said.
"The magnitude of wealth gains enjoyed by consumers during the last three years should provide a decent buffer."
The biggest positive contributor to financial assets in the quarter was a $1.7 billion increase in bank deposits, although this was largely offset by a $900 million decrease in the value of private shareholdings.
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