Following the 2007 Global Financial Crisis, wealth has been unequally shared amongst Kiwis, with millennial's living in the regions being the biggest losers.
Our State of the Investor Nation report found:
- 53% of young adults, 53% of low-income households and 64% of young renters live from pay check to pay check.
- 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 the regions are struggling financially compared with 23% of young adults in Auckland
There is no denying the New Zealand economy has grown strongly over the past decade, annual GDP growth has remained positive, peaking at just over 4.5% in Q4 of 2014 and national house prices have rocketed, with the national median house sale price increasing 10.6% over 2018 alone. Regional centres such as like Gisborne have seen some of the larger increases in the past year, so it’s unsurprising that young Kiwis in the regions are missing out as everything becomes more expensive.
It's probably to be expected that younger people will have less wealth than older people who have had longer to accumulate money and assets.
But worryingly our State of the Investor Nation report has revealed that young Kiwis today are disproportionately worse off than their older counterparts.
Coming of age during the Global Financial Crisis when employment rates were lower and investment and savings opportunities more limited, millennials have been hit hardest when it comes to wealth creation. Particularly when you factor in much higher costs of living, and greater levels of debt than previous generations, their ability to save money has become increasingly difficult.
The hardest hit seems to be those in the regions. Young people in the provinces are twice as likely to be struggling financially compared to young Aucklanders.
This may not come as a surprise to some people, but when you factor in record high rents and first home buyers being priced out of the Auckland housing market due to house prices growth of around 70% in recent years it hasn’t exactly been easy going in our largest city.
Perhaps surprisingly, our report identified the very real problem being that incomes in the regions are generally lower.
“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” says Joe Bishop, Kiwi Wealth General Manager Customer, Product and Innovation.
What does that mean for you? See how you compare against the data from The State of the Investor Nation report by answering 5 simple questions.
You can read more about The State of the Investor Nation report and download a full copy here.