Spicers HSI - June 2007

• Download Spicers Household Savings Indicators - June 2007

Media Release

Spicers Household Savings Indicators

EMBARGOED UNTIL 10am Tuesday 12 June 2007

Net worth per household has increased by approximately 86% in the last five years.

Spicers Household Savings Indicators report shows the net worth of the average New Zealand household rose $8,600 during the March 2007 quarter and $28,800 during the year, reaching $361,000. During the last five years, net worth per household has increased by approximately $167,000 i.e. 86%!

Highlights this quarter include:

• Housing gains dominated the asset side of household balance sheets. The value of the housing stock increased 3.4% during the quarter, down slightly from 3.9% the previous quarter but well up from just 1.0% in the June quarter 2006.
• The significant inflow into bank deposits that was experienced for much of last year slowed last quarter.
• The rate of growth in debt outpaced growth in asset values, both during the March quarter and during the year.

During the last five years, household debt levels have increased 93%. At the same time, the weighted average interest rate being paid by borrowers has risen by 1.4 percentage points. The total debt servicing obligations of consumers (interest only, excluding principal) have risen from an estimated $5.5bn in annualised terms in the March quarter 2002 to $12.7bn in the March quarter 2007.

Arcus Chief Economist Rozanna Wozniak also looks at the possible impact of KiwiSaver on New Zealanders.

“As long as debt-to-equity ratios remain at reasonable levels and net worth continues to rise, does it really matter how fast debt levels are rising? The answer is - it depends.”

 Editor’s note: Arcus Investment Management manages investment funds for Spicers. Arcus and Spicers are both subsidiaries of AXA New Zealand. 

Download Spicers Household Savings Indicators - June 2007

Ralph Little, Spicers Public Relations

09 374 1845