Bloomsbury blog New Zealand's wealth growth isn't what it seems

Bloomsbury newsletter, 06 October 2025

Statistics New Zealand's latest Household Net Worth Survey, released last week, seemed to bring welcome news. Between June 2021 and June 2024, the median household's net worth rose by 33%, from $399,000 to $529,000. At first glance, this suggests New Zealand families are in a stronger financial position.

But a closer look reveals a more complex reality. We break down the median value of different assets and liabilities in the chart below.

Wealth across selected asset and liability categories

Property values drive the numbers

The majority of this increase comes from rising property prices. Owner-occupied homes recorded a 39% gain in median value over the three years, while broader measures of real estate wealth - across investment and other property - rose between 35% and 49%.

This reliance on property wealth is not new, but it highlights a structural challenge in New Zealand households' financial position: most "growth" is tied up in an asset that is both illiquid and essential.

The limits of "paper wealth"

When housing values rise across the board, homeowners often feel wealthier, but their purchasing power hasn't fundamentally improved. Selling a home that has appreciated in value typically means buying another in the same inflated market - unless a household is willing to downsize or move to a less expensive area.

This type of "paper wealth" rarely translates into greater financial freedom. For many families, their homes may be worth more on paper, but that value cannot easily be spent or invested. In fact, an increase in the price of necessities like shelter, without a corresponding increase in disposable income could have a negative effect on the lifestyle of Kiwi families.

Higher debt levels offset gains

At the same time, mortgage debt has been climbing. Median borrowing on owner-occupied homes rose 20% over the same period, reaching $312,000. That means many households are servicing larger loans just to maintain the same lifestyle.

This dynamic represents debt-fuelled inflation rather than genuine wealth creation. Higher mortgage repayments reduce disposable income, limit savings capacity, and increase exposure to future economic shocks such as rising interest rates or changes in employment.

What genuine wealth growth looks like

True, sustainable wealth growth comes from financial assets—savings, investments, and other income-producing holdings. In contrast to property, these assets can provide flexibility, liquidity, and passive income.

But here the survey tells a less encouraging story. Median financial wealth grew just 13% from 2021 to 2024, while the median value of investment and managed funds actually fell 28%, from $69,000 to $50,000 – even while returns on these assets were relatively high (the S&P500 gained 27.6% over this period).

This decline in financially empowering assets likely reflects the pressure of higher living costs and mortgage commitments, which have left households with less capacity to save and invest.

The path to sustainable wealth

If household net worth were being driven by growth in financial assets, rather than property values, it would be a sign of stronger fundamentals: higher incomes, disciplined saving, and greater investment in productive assets. These are the building blocks of resilience and long-term prosperity.

For now, the data suggests that many households are wealthier on paper but not necessarily more financially secure. Sustainable progress will depend on shifting the balance away from property-driven gains and towards diversified, income-producing assets.

Note: Since this survey was conducted (in June 2024), QVNZ's house price index has fallen 0.28% (as of July 2025), while share markets have seen strong growth. The NZX50 has increased 11.9% and the S&P Global 1200 has increased 21% (as of September 2025).