Inequality Rising

New data: A $1m gap between rich and poor opens up in a decade

PLUS: The first data in 20 years on who receives inheritances

The IDEA Charitable Trust, September 26, 2025. Read in app

Summary:

• In absolute dollar terms, the disparity between the richest and poorest fifths of households has risen significantly in the last ten years, new data shows

• The house-price boom, meanwhile, has raised the wealth share of the middle classes compared to the 1%, although this effect may be temporary

• The growth of trust wealth appears to have slowed sharply, while those who inherit wealth are noticeably better off than those who do not

A decade of disparities

Source: Statistics New Zealand. ‘Net worth quintile’ denotes that the population has been divided into five, with quintile 1 the poorest and 5 the wealthiest

The wealth gap between the poorest and richest fifth of households has increased by over $1 million in the last decade, according to data released today by Statistics New Zealand.

Between 2015 and 2024, a typical household in the poorest fifth increased their net worth – that is, assets minus debts – by just $3,000, from $8,000 to $11,000. In the same period, the typical (median) household in the wealthiest fifth increased their wealth by over $1 million, from $1.32 million to $2.41 million. That means the gap between two groups likewise increased by over $1 million.

The information comes from a survey that has been carried out every three years since 2015. As the most detailed data source on what households own and owe, it is hugely important. One must also note, however, that owing to the sample size, and the reluctance of people on the Rich List to take part, it will significantly underestimate the assets held by the very wealthiest.

A wealthier country?

New Zealand appears to have become significantly wealthier in the past decade: households’ total net worth has almost exactly doubled, from $1.04 trillion in 2015 to $2.07 trillion last year.

But much of this apparent increase, of course, is just an on-paper rise in the value of housing. In 2015, New Zealanders had $455 billion in owner-occupied homes and other real estate; subtracting the mortgages held against those properties gives a net figure of $325 billion. The equivalent figure in 2024 – housing wealth minus mortgages – was $867 billion. The change in that figure alone accounts for half the apparent increase in New Zealand’s wealth over the decade.

Wealth disparities – declining, increasing, or unchanged?

There are, of course, many different ways to measure disparities. The Statistics New Zealand press release accompanying today’s data describes the wealth distribution as “unchanged”.

This might seem strange, given the $1 million gap described above, but simply reflects a decision to focus on a different number – in this case, the share of assets held by the wealthiest tenth of households. Focusing on percentages as opposed to absolute numbers can, in general, make a big difference.

Consider, for instance, two individuals who double their wealth, one by going from $10,000 to $20,000 and one by going from $1 million to $2 million. On some measures, that counts as stable inequality, because both have increased their wealth by 100%, even though in absolute terms the gap between them has increased by nearly $1 million. It is partly a value judgement as to which of those measures matters most.

A (temporarily) rising middle-class?

Housing is relatively unimportant to the wealthiest New Zealanders. As Statistics New Zealand notes: “The wealthiest 20 percent of households held the largest share of their wealth in financial assets such as pension funds, shares, and investment funds. The remainder of households held the largest share of their wealth in non-financial assets such as real estate and durable goods.”

What that means is that the last decade’s house-price boom has improved the position of the middle classes compared to the top 1%. Since 2015, the share of wealth held by the top 1% of individuals has declined from 21.8% to 17.5% (although this will, as above, miss out the Rich List and thus be a significant underestimate).

This does not mean that those individuals – around 50,000 New Zealanders – have become poorer. But because the house-price boom has particularly benefited the middle classes, the latter’s share of wealth has – at least temporarily – increased.

Consider, for instance, the people who sit between the middle of the country and the lower edge of the top 10%. If the population were represented by 100 people lined up from poorest (no. 1) to richest (no. 100), these would be numbers 50 to 90 – the middle classes, in other words. Since 2015, their wealth share has risen from 38.6% to 42.4%.

To put things differently: both the 1% and the middle classes have increased their wealth in the last decade, but the middle classes have done so more rapidly, thanks in part to the house-price boom.

The data in this survey, however, were collected between July 2023 and June 2024, before the pandemic-era rise in house prices had fully unwound. The next survey, set down for 2026-27, may show quite a different picture.

So, the above figures notwithstanding, there is little reason to think that wealth disparities have declined in New Zealand in any permanent sense. In any case, every survey since 2015 has shown that the poorest half of the country have just 2% of the wealth, a sobering statistic.

A plateau for trusts?

Between 2015 and 2021, the amount of wealth held by New Zealanders in trusts nearly doubled, from $224 billion to $400 billion. Between 2021 and 2024, however, that total increased just another $8 billion, to $408 billion.

This is still a very large amount – nearly $1 in every $5 of household assets. But it does suggest the rate of increase has slowed dramatically. This could be linked to some recent modest policy changes around trusts, including increased reporting requirements and the alignment of the top income tax rate on trusts with the top rate for individuals.

Who inherits?

Today’s data provides – for the first time since the early 2000s – some information on inheritances and gifts.

The 2024 survey asked people if they had received an inheritance at any point in their lives. Around 800,000 individuals said they had – roughly one-fifth of the adult population. Those people were, on average, twice as wealthy as the typical New Zealander, recording a mean net worth of $930,000, as opposed to $501,000 for the average Kiwi.

Some variance is seen if one looks at inheritances received on a household rather than individual basis, but the story is broadly the same: people receiving inheritances tends to be twice as wealthy as the average.

Statistics New Zealand have not yet published data on the size of the inheritances received, and their exact distribution across the population. But there is the potential to do so in future – something that would be significantly improve our understanding of disparities and material advantages in New Zealand.