Millennial renters in regions the biggest losers
The spoils of a decade-long period of prosperity are not being enjoyed by all, with new evidence confirming a ‘lost generation’ of wealth.
Advance findings from Kiwi Wealth’s State of the Investor Nation, a comprehensive report looking at perceptions of wealth and wealth creation, confirms that young Kiwis bore the brunt of the 2007 Global Financial Crisis.
State of the Investor Nation 2019 – advance findings:
• 53% of
young adults, 53% of low-income households and 64% of
renters live from paycheck to paycheck
• 51% of young adults, 47% of low-income households and 47% of renters don’t believe they have the capacity to save money
• 40% of young adults in regions are struggling financially, compared with 23% of young adults in Auckland.
“We’ve had a decade of strong economic growth, underpinned by record share market performance and low unemployment,” says Joe Bishop, Kiwi Wealth General Manager Customer, Product and Innovation.
“But the wealth created by our ‘rockstar’ economy hasn’t been evenly distributed, and it’s our young people that have missed out most.”
The Kiwi Wealth survey of more than 2000 adult New Zealanders showed young people, especially renters and those living in regional centres, were least well off with lower earnings, fewer assets and less overall wealth.
“It’s logical that young people will generally have less wealth than older people who have had longer to accumulate money and assets.
“But the worrying finding our survey has revealed is that young Kiwis today are disproportionately worse off. There’s an inherent wealth gap between young and old, and that gap is widening fast.”
Survey results showed the growing wealth gap was especially pronounced for young people who rented their accommodation and who lived outside major urban centres.
“This is a generation that mostly came of age during the 2007 Global Financial Crisis and struggled most through the recession that followed. They are faced with much higher costs of living and greater levels of debt than previous generations and, as a result, have limited or no capacity to save money and invest to create future wealth.
“And wealth prospects seem bleakest in the regions. Young people in the provinces are twice as likely to be struggling financially compared to young Aucklanders. That was a surprising finding, given how tough the Auckland market has been for some time for first-home buyers, but shows that generally lower incomes in the regions are a very real problem.”
Bishop said finding answers to the issues raised by the Kiwi Wealth survey was tough.
“There’s no silver bullet, no single piece of legislation that will close the gap. But it’s something we must address as a nation because, as the population ages, young people’s ability to create wealth will be of huge importance to New Zealand’s future prosperity.”
The data has been released in in advance of Kiwi Wealth’s launch of its first State of the Investor Nation report. The full report will be published next month.