Are you feeling wealthier?

Are you feeling wealthier?Stats NZ has released updated national accounts data that shows household wealth slipped in the June quarter, although we are still better off than a year ago.In the three months to June, household net wealth dropped by 0.3 percent, or $8.4 billion to $2.593 trillion but was still 1.9 percent higher than a year earlier.Stats NZ said New Zealand has about two million households, which would mean wealth of about $1.3 million per household, but that hides very significant variations.The fall in the most recent quarter was driven by a drop in housing and land values, which were down $16.6 billion or 1.4 percent. They were also 0.9 percent lower than a year earlier.Westpac senior economist Satish Ranchhod said housing assets had recorded no growth since late 2023.Financial wealth increased 0.6 percent to $1.39 trillion, 4.6 percent higher than June 2025.Superannuation fund assets rose strongly over the quarter. Disposable incomes rose 5.2 percent over a year, led by income from self-employed businesses, up 12 percent.Ranchhod said that would include stronger earnings from the agricultural sector, which has been boosted by strong commodity prices.The amount that households were spending on interest was up in the June quarter, which Ranchhod said was the first increase in two years."Over the past few years, many borrowers saw their debt servicing costs fall as they rolled off earlier high mortgage rates and on to lower ones. That helped to support household spending."However, the easing in average borrowing cost has now ended. Recent months have seen mortgage rates pushing higher as the RBNZ has begun to hike the Official Cash Rate, with further hikes expected over the coming year."Looking ahead, we don't expect a significant increase in average household borrowing costs. However, we won't see the same support for spending that we did over the past few years."Financial liabilities were up 4.9 percent compared to 2025.Simplicity chief economist Shamubeel Eaqub said both the drop in house values and the wider increase in the cost of living, particularly in essentials, would be making people feel worse off."For those who bought during the last decade, it's been a ****show on house prices. But those who bought before are still ahead. But it's not rising. That means we aren't moving as much, aren't renovating ... that shows up in house sales, furniture, hardware."He said how the impact was felt would vary across different parts of the economy.Infometrics chief forecaster Gareth Kiernan said house price falls were probably not a significant drag on many households anymore, except those who bought at the peak of the market."It's probably more in terms of the cost of living, essentials going up in price overlaid with fuel prices being at levels we haven't seen before."Incomes and employment were growing, he said, and GDP was increasing more than it had in recent years."Things are heading in the right direction but not enough to feel like we've really crawled out of the hole we've found ourselves in."Otago University economist Murat Ungor said changes in wealth would affect spending but the effect was small."A study from 2018 on NZ finds that the estimated elasticity of consumption spending to housing wealth is about 0.22 percent. In dollar terms, the average marginal propensity to consume out of a one-dollar increase in housing wealth is around 2.2 cents. Income and the prices people pay every week matter more."It does depend on who we are talking about. For older homeowners with little or no mortgage, a fall in house values is largely a paper change. For people who bought recently with a high loan relative to the value of the house, or who need to refinance soon, falling values are more worrying, because their equity cushion is thinner."For renters and would-be first-home buyers, lower prices may be welcome news. Aggregate figures hide these differences."I would say the sense of being worse off is driven more by what is happening to prices and incomes than by house values."Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make and spend money