Rising property prices boost household assets

28 June 2018

Rising property prices from 2013 to 2016 boosted the New Zealand household sector’s assets by $184 billion, Stats NZ said today. The sector’s net worth reached $1,312 billion in March 2016.

The growth in property values over the four years contributed 51 percent of the $364 billion rise in household net worth over this period. In comparison, household property values rose $1.5 billion over the five years from 2008 to 2012.

When properties are bought and sold, the prices paid establish new market valuations for all properties, not just the ones bought and sold. This has a general effect on property values for all property-owning households.

From 2013 to 2016, the household sector borrowed additional loans of $36 billion. During the same period, households deposited an extra $45 billion at banks, but they withdrew $6 billion from their equity and investment fund asset holdings.

“From 2008 to 2016 households lent more than they borrowed,” national accounts senior manager Gary Dunnet said.

Within the economy, some sectors have an overall requirement for more financial resources than they generate; other sectors are net lenders, and are a source of funds to the net borrowers.

Businesses generate the main demand for financial resources. Incorporated non-financial enterprises were the largest net borrowers from 2008 to 2016. Unincorporated enterprises were also net borrowers. Central government also ran budget deficits over much of this period.

The main funding sources for 2008 to 2016 were overseas lenders, households, investment funds, and the EQC and ACC schemes that are administered by central government. Pension funds were not significant lenders in their own right, but they provided resources to investment funds.

“These are some of the results from this first release of provisional accumulation accounts for New Zealand,” Mr Dunnet said.

“This set of statistics adds to the suite of integrated national accounts statistics for the country.”

The accumulation accounts record changes in the value of assets and liabilities between balance sheet positions. These changes can occur from transactions, and from non-transactional changes such as changes in market value and other volume changes in assets and liabilities (eg a write-off of house values due to catastrophic earthquakes).

These accumulation statistics will be updated in December 2018. The accumulation accounts are the second stage of a four-stage programme to improve our national accounts. The next stage is to compile the accounts each quarter, which is due for release in the first half of 2020.

Authorised by Liz MacPherson, Government Statistician, 28 June 2018.

For more information about these statistics:

• Visit National accounts (change in assets): 2008–16

• See CSV files for download

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