Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

The cost of keeping up with the Joneses

Monday 22 November

The cost of keeping up with the Joneses:

Aucklanders carry lion’s share of New Zealand’s personal debt

A project initiated by Metro magazine has revealed that Aucklanders, making up 30 percent of New Zealanders carrying debt, have taken on 40 percent of the nation’s personal debt – a massive $29 billion, compared with $43 billion for the rest of the country.

“Mortgages, credit cards, student loans, bank loans and hire-purchase agreements… when you add them all up and take a look at who owes what, the breakdown is staggering. Your average Aucklander owes more money than people in the rest of the country, and what’s more, for the better part of their working lives, Aucklanders are also worth less,” said Gilbert Wong, Senior Writer for Metro.

The project, initiated by Metro with Statistics New Zealand, found that Aucklanders owed on average $73,471 per debtor, compared with $47,569 per debtor for the rest of the country. Average net worth was also found to be lower for most age bands, with the balance only shifting at the 60-64 age band.

The project analysed figures from the landmark Household Savings Survey conducted in 2001, which benchmarked assets and personal debt levels across the country – levels that have since continued to rise.

“As a result, not only do we know that Aucklanders have bitten off the lion’s share of the country’s personal debt – what we actually have is a conservative figure,” said Mr Wong.

Although a large part of the difference in debt levels comes down to higher house prices in Auckland translating into higher mortgages and rents, additional research also indicates that it’s also the result of a keeping-up-with-the-Joneses attitude.

A Nielsen Media Research survey in August of households with incomes over $80,000 shows that compared with people in the same bracket elsewhere in New Zealand, Aucklanders regard success and being seen as successful as more important than other New Zealanders. They are also more likely to keep up with the latest fashion, try new foods and eat out.

“You want people to see how well you’re doing so you put up a façade. If you were to rank New Zealand cities, then Auckland is the capital of conspicuous consumption,” said financial advisor Murray Weatherston, one of several commentators spoken to by Metro.

Former Treasury economist and chief executive of the New Zealand Institute David Skilling put the responsibility for debt in the domain of the middle class: “Their attitudes have changed. They are the people buying up at the garden centres and the car dealers. The debt problem is a middle New Zealand problem.”

Mr Skilling also confirmed the trend of New Zealanders opting to spend on big-ticket items for themselves: “That’s where the money is going, it’s on big-screen plasma televisions rather than financial assets.”

Another statistic showing the extent of the difference in debt levels between Auckland and the rest of New Zealand was the average 2001 mortgage, at $155,082 for Auckland compared to $92,697 for the rest of New Zealand. Increases in mortgages since then put the figures at approximately $183,000 for Auckland and $109,382 for the rest of New Zealand.

The full Metro article (attached) provides more details about how Auckland measures up against the rest of the country.

Other debt facts: Single Aucklanders between 25 and 29 have an average net worth of $492. The same age group elsewhere has an average net worth of $1856. Auckland couples aged 40 to 44 have an average net worth of $286,721. Couples aged 40 to 44 elsewhere in New Zealand have an average net worth of $324,915. Aucklanders with student loans owe $1.7 billion.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>

ALSO:



Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO:

Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>

ALSO: