Property assets, debt drive changes in New Zealanders' wealth

Source: Xinhua| 2018-12-14 18:24:58|Editor: xuxin
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WELLINGTON, Dec. 14 (Xinhua) -- For typical New Zealand households owning the home they live in, the value of their home rose almost 100,000 NZ dollars (67,805 U.S. dollars) over the last three years, the country's statistics department Stats NZ said on Friday.

Median property assets for people's homes were up from 350,000 NZ dollars in the year ending in June 2015 to 448,000 NZ dollars in 2018, Stats NZ said.

Household debt associated with their homes also increased. Median property debt for people's homes increased from 172,000 NZ dollars to 206,000 NZ dollars over the three years.

"Because many people's main asset is the house they live in, changes to the value of residential property has a big impact on household net worth," labor market and household statistics senior manager Jason Attewell said in a statement.

Net worth measures the value of all the assets a household owns, including property and savings, less all the debts, such as mortgages and credit card debt.

The median value of household assets was up 24 percent to 496,000 NZ dollars in the three years to June 2018. During the same period, household debt remained unchanged at about 42,000 NZ dollars in the year to June 2018, and household net worth rose 18 percent to a median net worth of 340,000 NZ dollars, statistics showed.

For most households, the amount of property debt for each dollar of property asset held remained stable or reduced over the three years to June 2018. However, for households in the lowest 20 percent of the net worth distribution, the debt per dollar of asset, specifically for the home they live in, increased from 1.1 NZ dollars of debt to 1.75 NZ dollars, Stats NZ said.

"While the amount of debt a household holds is important, for wealth, it's the size of the debt in relation to the size of the assets that determines a household's net worth. Households with the lowest net worth now have more debt per dollar of asset in the house they live in than three years ago," Attewell said.