Although the median net worth of New Zealand households has increased between 2015 and 2021, there has been no significant change in the distribution of wealth over this period, Stats NZ said.
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Net worth is the value of a household’s assets, such as real estate, retirement savings, and shares, less its debts, such as mortgages, credit card debt, and student loans.
The median net worth of New Zealand households in 2021 was estimated at $397,000 – an increase of 21 percent from the last survey in 2018 and an increase of 39 percent since the first survey of its type in 2015. Median net worth indicates the level where half of all households have more and half less than this net worth.
“The top 10 percent of New Zealand households continues to hold approximately 50 percent of New Zealand’s total household net worth – as they did in 2015, which was Stats NZ’s first household net worth survey of this type,†manager wealth and expenditure Mike Webb said.
These findings are based on the results from a survey of over 4,400 households as part of the Household Economic Survey carried out between August 2020 and June 2021.
Although the distribution of wealth has remained unchanged since Stats NZ began its net worth survey in the year ended June 2015, wealthy households continue to see greater increases in the value of their wealth.
While the median net worth of the wealthiest 20 percent of New Zealand households increased by $313,000 in the last three years to $2.02 million for the year ended June 2021, median net worth of the bottom 20 percent of households increased by $3,000 during the same period to $11,000.
That the wealthiest 20 percent of the surveyed households hold 69 percent of total household net worth reflects the uneven distribution of wealth in the country.
In terms of assets and debts, while the wealthiest 20 percent owns 62 percent of total household assets and 24 percent of total household liabilities, those in the lowest 20 percent hold 1 percent of total household assets but 11 percent of total liabilities.
“Those who own their home are typically in a much stronger financial position than those who rent,†Dr Webb said.
The median household net worth of those who own or partly own their home was $635,000 in the year ended June 2021, compared with $54,000 for those renting. Where the house is held in a family trust, the median is much higher at $1.19 million.
“The high net worth of households where the dwelling is held in a family trust reflects the greater prevalence of trusts among the wealthy,†Dr Webb said.
“As the net worth survey captures the capital (or rateable) valuation of real estate at the time of the survey, the net worth of homeowners would be even higher when measured with market values above capital value,†Dr Webb said.
Between the quintile groups, there are also significant differences in financial assets including currency, bank deposits, pension funds, shares and other equity, life insurance funds, and annuities. Those in the wealthiest 20 percent have median financial assets of $1.11 million in the year ended June 2021, whereas those in the bottom 20 percent had a median value of $9,000.
New Zealanders’ net worth typically increases with age until around retirement. In 2021, young people (15–24 years) had the lowest median individual net worth ($3,000), while people in the traditional retirement ages (65–74 years) had the highest ($433,000). There are, however, disparities among ethnicities, with those of European ethnicity typically reaching retirement age with greater financial wealth.
While information from over 4,400 households contributed to this survey, it is still unlikely that any one household, such as a very wealthy family, might be living in a house selected for this survey. As such, this survey may not provide a representative picture of the small number of the extremely rich. ■