New Zealand Household Finances Are Being impacted by the change in interest rates and falls in property prices as inflation continues to bite. The trouble is though these aggregate numbers do not really tell the true story. Whilst we do not run our surveys in New Zealand, we think the parallel with Australia would tell us that the rule of thirds applies. One third of households are under severe financial pressure, one thirds have no issues at all and are enjoying strong income growth and buffers and one third is in between, but slipping towards pressure as interest rates continue to rise, putting upward pressure on mortgage repayments and rents, and downward pressure on home prices and savings.
However, Stats NZ said The net worth of New Zealand households fell $88.9 billion, 3.7 percent during the June 2022 quarter. The June 2022 quarter decline is more than twice the $40.1 billion fall in the March 2022 quarter. The two consecutive quarters of declining household net worth follow ten consecutive quarters of gains.
The latest edition of our finance and property news digest with a distinctively Australian flavour.
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Caveat Emptor! Note: this is NOT financial or property advice!!
First 🎉 Speaking to an accountant in NZ today its not looking good in their economy now or in the year to come. He said home owning Kiwis are naive about the true financial benefit they have received from the tax system in NZ over the past decades, in comparison to other countries. They don’t know what to make of what has hit them now.
Kiwis are more resourceful them Aussies are , if everything goes belly up they can easily live off the land without to much effort.
With rising rates and falling property values savings rates will increase because of the tighter lending standards. This is not because of negative wealth effect, but as mortgage fixes end they are facing higher new rates. So higher rates and increasing the overpayments to keep access the best rates is inevitable.
I identify as mortgage free. F*ck off bank.
Unemployment numbers are fake, sickness beneficiaries are not considered unemployed. Being sick of work is a cool trend these days
Way too much leveraged paper inflated equity release debt is going to be the killer. Orr knows he overcooked it and will Jeep rising until inflation is at 2%. Monetary policy and the crazy governments fiscal drunken sailor spending are clashing and Labour stating they would build and make housing more affordable is completely opposite of what has occurred. Oh wait blame it on the plandemic or Russia. No politician ever owns it.