KEY POINTS:
New Zealanders' financial assets grew faster than the value of their homes last year for the first time in six years as the housing market slowed and households looked to other means of accumulating wealth.
Wealth manager Spicers' quarterly Household Savings Indicators showed overall household net worth -
assets minus liabilities - rose 9.7 per cent or $49 billion to $552 billion.
That is the continuation of a trend that has seen gains in net worth fall from almost 27 per cent in 2003 and 15.3 per cent in 2005.
During 2006 the value of households' financial assets rose 10.6 per cent, surpassing the increase in the value of housing assets - at 10.4 per cent - for the first time since 2001.
"Housing assets were increasing quite rapidly but that trend has been slowing while financial assets have been growing faster in the last few quarters," said Rozanna Wozniak, chief economist at Spicers' fund manager Arcus Investment Management.
"They've met in the middle."
Westpac economist Doug Steel said tentative signs that households were looking beyond housing as a means to accumulate wealth were positive.
"Some diversification of the household balance sheet would be a good thing given that we are so heavily weighted towards housing. Being so undiversified does carry risk.
"To the extent that is happening, it is an encouraging sign. Financial assets are a little more productive than housing assets, long may it continue."
While the housing market still had considerable momentum, "the magnitude of the rises that we're seeing now are much smaller than they were a few years ago and we did have a cool down last winter", Wozniak said.
The largest portion of the annual $14.4 billion increase in total financial assets was the $9.6 billion more New Zealanders poured into bank deposits, the biggest annual rise in the 16 years that Spicers has produced the data.
"The economy's been a bit softer, there's been a few concerns with finance companies last year and we're seeing consumers opt for less risky assets," said Wozniak.
Some of the increase in financial assets was due to the strong performance of shares. The value of private shareholdings increased by an estimated 12.8 per cent or $1.8 billion over the three months to the end of the year.
Meanwhile, the value of managed funds held by households increased by 4.8 per cent over the year to $43 billion.
Binu Paul, chief executive of industry research company Fundsource, noted the net inflows of money to managed funds last year had been positive - for the first time since 2001.
Getting richer
* Household net worth rose by 3.8 per cent over the December quarter and 9.7 per cent over the year to $552 billion, says fund manager Spicers.
* Per household that represents an $11,700 quarterly increase or $26,600 over the year to $352,000.
* Spicers says that while the housing market has cooled from its peaks, households have increased savings through bank deposits, shares and managed funds.
