Statistics New Zealand has released household wealth data for the June quarter of 2022, which shows that the net worth of New Zealand households fell $88.9 billion (-3.7%) over the quarter, which was more than twice the $40.1 billion decline (-1.6%) in net worth recorded over the March quarter:
Kiwi household net worth down $129 billion.
Kiwi household net worth was $129 billion (-5.2%) below its December 2021 peak as at the June quarter.
New Zealand house prices fell heavily over the September quarter, down 5.4% according to Quotable Value:
New Zealand house prices plummeted in Q3.
The REINZ and CoreLogic posted similarly large quarterly declines.
This means that Kiwi household wealth will take another significant haircut when Statistics New Zealand releases its September quarter data in January.
This week’s shock inflation result – i.e. 7.2% in the year to September – will add further to the pain given the Reserve Bank of New Zealand (RBNZ) is likely to respond with further aggressive monetary tightening.
In response, ASB and ANZ economists lifted their peak forecasts for the official cash rate, with both banks tipping another 0.75% hike next month followed by more rises.
After recording one of the world’s biggest house price booms over the pandemic, New Zealand now faces one of the biggest busts.
Given Kiwi households have more wealth tied up in housing than virtually any other nation, their wealth will get eviscerated.
