Household Spending Exceeds Income In June 2024 Quarter

New Zealand household saving decreased to -$479 million in the June 2024 quarter as household spending increased while net disposable income fell, according to figures released by Stats NZ today.

Seasonally adjusted household spending increased 1.0 percent to $60 billion in the June 2024 quarter. The increase in household expenditure was driven by spending on services and non-durable goods like groceries, partly offset by a decrease in spending on durable goods like motor vehicles.

Household net disposable income decreased 0.9 percent to $59 billion in the June 2024 quarter. Total household income decreased 0.2 percent, falling for the first time since the start of the reported series in 2016.

Household net disposable income is the amount of money a household has once all income such as wages, interest, and child support, and income payable such as taxes have been accounted for. It represents the money available for a household to save, spend, or invest.

These statistics describe the household sector as a whole, rather than the different experiences of individual households.

"With net disposable income falling in the June quarter, the household sector is funding the increase in spending through borrowing and drawing on existing funds," national accounts industry and production senior manager Ruvani Ratnayake said.

Growth in wages and salaries was 0.8 percent this quarter, lower than the average quarterly growth of 2.1 percent from December 2021 to March 2024.

"Slower growth in household wages and salaries reflects fewer working hours in the June quarter," Ratnayake said.

Labour market statistics: June 2024 quarter has more information on wages and salaries.

Dividends received and the income of self-employed business owners and partnerships both decreased in the June quarter.

Household net worth decreases

Household net worth decreased 2.0 percent ($47 billion) in the June 2024 quarter following increases in the previous three quarters.

Net worth is the value of all assets owned by households less the value of all their liabilities.

"Despite a fall this quarter; household net worth increased 1.0 percent, or $24 billion, over the year to June 2024," Ratnayake said.

Among household assets, the value of owner-occupied property decreased $21 billion or 1.8 percent this quarter, and equity and investment fund shares decreased $27 billion or 2.6 percent.

"Household equity assets include the value of rental properties less the mortgages held against them," Ratnayake said.

"The June 2024 quarter decrease in household assets reflects a fall in property values for both homeowners and landlords."

Household financial liabilities grew 0.7 percent, continuing a relatively steady increase in recent quarters. This was driven by a 0.9 percent increase in housing loans, and partly offset by decreases in consumer loans (1.2 percent) and student loans (0.7 percent).