Spicers HSI - September 2008
- Download Spicers Household Savings Indicators - September 2008
Media Release
Spicers Household Savings Indicators
Household net worth holding up
Spicers latest Household Saving Indicators report shows New Zealand household net worth dipped slightly by $6700 or 1.7% during the June 2008 quarter. This comes after small decreases of $6400 for the March 2008 quarter and $1930 for the December 2007 quarter.
Spicers CEO Gordon Noble-Campbell says for most New Zealand households, the decline needs to be put into context with the very high gains they have enjoyed over recent years. “Despite the volatile economic times we’re currently experiencing, the average New Zealand household net worth is $380,574 - up $148,074 over the past five years.”
“Most households are in a strong financial position with only some belt tightening required to get through the current uncertainty.” On the other side of the ledger, the quarterly growth in liabilities has slowed to 1.1%, the lowest increase since the September quarter of 1998. The annual rate of growth has slowed to 8.6%.
Mr Noble-Campbell says this is well down from the housing boom peak of 16.4% for the year ended June 2004.
“New Zealanders are taking positive steps to manage their debt as they reduce consumption-fuelled borrowing based on rising house prices. Households are wisely much more wary of taking on new debt in the current economic climate.”
Financial assets increased by 0.4% as households move to less volatile income assets such as cash, term deposits and Cash PIE funds. Mr Noble-Campbell says this is encouraging, particularly if the trend strengthens.
“With more than 80% of our wealth tied up in residential housing, it’s great to see more New Zealanders starting to value the benefits of diversification by investing in a wider range of financial assets.”
“Also, on the upside, is the potential for “cashed up” investors to return to equity markets when the recovery comes with the possibility of picking up some bargains on the way,” he says.
Editor’s note: Arcus Investment Management manages investment funds for Spicers. Arcus and Spicers are both subsidiaries of AXA New Zealand.
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For further information contact:
Ralph Little, Spicers Public Relations
09 374 1845
Spicers Household Savings Indicators is produced by Spicers, NZIER and Morningstar on a quarterly basis. All opinions, statements and analysis are based on information from sources which Spicers, NZIER and Morningstar believe to be authentic and reliable. Spicers, NZIER and Morningstar issue no invitation to rely on the Spicers Household Savings Indicators. Any reliance individuals or businesses place on them will be based on their own judgement and not that of Spicers, NZIER and Morningstar. The material contained in the Spicers Household Savings Indicators is for general information purposes only and is not intended as, nor capable of being, financial advice. Before any decision is made or action taken based on text of this publication, readers are urged to seek professional advice.