New Zealand has seen itself as an egalitarian society, but new statistics show how wealth and opportunity have diverged dramatically around the pivot of who owns property and who rents in the last 20 years.
The children of renters cannot now easily get on to the ladder to financial security without marrying into a new landed gentry that is worth $1.2 trillion because property values have risen $781 billion since 1997.
And unlike in the mid 2000s, the newly wealthy class of home owners, and often multiple home owners, are now choosing to hold onto that wealth, rather than spend it. Property owners have stopped using their houses like ATMs, partly because they are saving more as they age, and partly because regulators have made it much harder to withdraw equity from homes.
New Zealand's households have actually had a fantastic decade since the Global Financial Crisis - or at least those owning property have. A new set of national statistics shows household net worth has risen more than $323 billion to $1.24 trillion over the last eight years, while rents have risen 30 percent (faster than the average wage growth of 25 percent).
Statistics New Zealand released its new series of annual balance sheets on Friday, which showed how household wealth changed between 2007 and 2015. The driving force in the improvement in net worth was the rise in property values over that time.
The figures echo a household balance sheet series compiled by the Reserve Bank, which shows an even greater improvement over the last two decades. The Reserve Bank series starts in December 1998 and shows household net worth has risen from $349 billion to $1.21 trillion by the September quarter of 2016, due largely to a rise in the value of houses and land from $221 billion to $1.002 trillion.
Housing debt has risen quickly too over that time, but not nearly as much, hence the more than trebling of net worth. Home loans rose from $53 billion in 1998 to $230 billion between 1998 and 2016.
Fresh research from the Reserve Bank also shows that property-owning households are now effectively hoarding that extra wealth, rather than spending it.
From 2004 to 2008 households withdrew equity from their households by borrowing against the higher value of their homes to supplement their incomes from wages. The Reserve Bank released an analytical note from Martin Wong last week that looked at how the wealth effect of higher house values had translated into household consumption.
Wong found that per capita consumption growth had moderated since the Global Financial Crisis.
"The modest growth in per capita consumption has coincided with an increase in the household saving rate, a slowing in credit growth, and a positive injection of equity into the housing sector by households," Wong wrote.
He said the change could be because home owners think their capital gains may not grow so fast in future, or it may be because home owners want pay down debt.
Most of those home owners are in their late 40s, 50s and 60s, and are keener to save as they near retirement.
The newly wealthy intend to stay that way.
Younger renters with student debt will struggle to gather that same wealth over the next 20 years. New Reserve Bank rules make it harder for first home buyers to borrow heavily to get onto the ladder, while the structural fall in interest rates that has happened over the last 20 years and helped drive house prices higher cannot be repeated.
And young renters also have to repay debt built up while getting educated.
The same household balance sheet figures from the Reserve Bank show student loans rose from $2.65 billion to $15.3 billion between 1998 and 2016.
Statistics New Zealand figures on household net worth from mid 2016 show net worth concentrated among property owners in their 40s, 50s and 60s.