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RBNZ finds more savings less loans

RBNZ finds more savings less loans

(17 July, 2012 – New Zealand) An increase in savings and unwillingness to take on extra debt should lead to a steady improvement in New Zealand’s overall net worth according to Reserve Bank of New Zealand (RBNZ) figures. RBNZ figures show that the value of household financial assets, which includes money invested in bank deposits, shares, superannuation schemes and managed funds, increased by NZ$8.3 billion (A$6.4 billion) last year, while household debt, which includes mortgages, credit card spending and personal loans, grew by just NZ$1.75 billion.

The turnaround is especially welcome because figures compiled by the Sunday Star-Times show that average net worth per household has increased by just 2.4 percent during the difficult economic conditions of the past five years.

The Star-Times has taken the Reserve Bank's household assets and liabilities figures and divided them by the estimated number of households in the country to produce a household balance sheet.

This shows that cash assets - bank deposits, superannuation, shares and managed funds - averaged NZ$132,996 per household in March this year, an increase of NZ$11,709 (9.7 percent) on March 2006, before the onset of the global financial crisis and subsequent economic downturn.

However, this was almost matched by a NZ$10,523 (10.4 percent) increase in average debt per household over the same period.

The figures show some major changes in Kiwi’s saving and spending habits over the same period. The average amount of money invested in superannuation schemes has increased by 35.5 percent, while the amount of money held in bank deposits and other fixed interest investments such as bonds has increased by more than 25 percent.
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