Despite tax cuts, falling petrol prices and lower interest rates, the net worth of the average Kiwi household is nearly $40,000 less than a year ago.
A report from Spicers household savings indicators showed that the average household net worth was $355, 516, a decline of 3.9% or $14,591 during the September quarter.
This followed a $17,017 decline for the June quarter, a $6448 decrease for the March quarter and a $1904 drop for the December 2007 quarter.
The decline was blamed largely on the continuing fall of prices in the housing market - which has 70% of the nation's wealth ($600 billion) tied up in it - and slowing building activity.
Spicers investment communications manager Aaron Hing said because the report was only to the end of September 2008, the net worth decline could be further still.
"We actually haven't yet seen the full extent of the credit crisis and that certainly happened to sharemarkets around October and November and house prices have continued to slide," he said.
However, net financial worth rose 0.2% over the last quarter, with increases of private holdings in bank deposits and government securities offsetting declines in the value of managed funds and superannuation fund assets.
Mr Hing said banks had been "a big recipient" of in-flows, with bank deposits the biggest source of growth in financial assets during the year, up 10% to $8.4 billion.
But he said with economists tipping interest rates to fall to 3.5% yields would not be great.
"People should choose investment assets that are going to beat the rate of inflation over the long term and cash isn't going to do that," he said.
New Zealanders are also decreasing their personal debt levels with the quarterly growth in liabilities slowing for the third quarter in a row to 0.7%, the smallest quarterly increase in 18 years.
The annual rate of liability growth has also slowed to 6.8%, down from the housing boom peak of 16.4% for the year ended June 2004.
It is expected to move lower in coming quarters.
But Mr Hing said the big cloud over households was uncertainty in the labour market with unemployment forecasts set to peak around 7% or 70,000 fewer people in jobs this time next year.
Despite the forecasts, he said there were things happening that were needed "to knock it on the head".
"The first was very low interest rates, the second is that governments not only in New Zealand but around the world have decided to go on a spending spree creating enterprises that are going to employ people and get people spending," he said.
