Spicers Household Savings Indicators - December 2008
Download Spicers Household Savings Indicators - December 2008
Household wealth keeps falling.
Spicers’ latest Household Savings Indicators report shows the net worth of the average New Zealand household fell $14,500 during the September 2008 quarter following a decline of $17,000 the previous quarter.
Aaron Hing from Spicers says average household net worth was $355,516, nearly $40,000 lower than levels of a year earlier. He says the decrease in net worth for the quarter (-3.9%) was slightly slower than experienced during the June quarter (-4.4%).
“This was due to both a smaller rate of decline in household’s assets and a further slowing in the rate of growth in household liabilities.”
“The decline in household assets was driven almost entirely by declines in house prices and lower growth in the housing stock as building activity slows.”
Mr Hing says households are taking the right steps to manage their way through the current economic volatility by reining in their spending and borrowing.
“The quarterly growth in liabilities has slowed to 0.7%. This is the smallest quarterly increase in 18 years. The only time it was lower was in 1990 during the last major recession.”
He says tax cuts, falling petrol prices and lower interest rates are freeing up household cash but in the current environment, households will remain cautious about opening their wallets too wide.
“The big cloud over households is the labour market. The recent rise in unemployment, and likely further rise, will put enormous pressure on individuals with high levels of personal debt if they lose their jobs.”
Mr Hing says despite this concern, the last few years of capital gains have left many New Zealanders in a secure financial position.
“The net worth of the average New Zealand household is 85% higher than it was 10 years ago, and that’s after taking account of the recent declines.”
| Editor's note:The large change in financial net worth for the quarter and year (seen in the HSI summary table contained in the attached report) reflects a revision of the data. It does not relate to any specific event in the market and will become relevant once it is compared to future results. |
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For further information contact:
Aaron Hing, Spicers Portfolio Management
027 600 7394
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.