The Newfound Assetocracy

The Newfound Assetocracy

Become Wealth Editor
How the housing boom created a new class of New Zealand millionaires

We all know how some Kiwis purchased a house in a neglected Auckland suburb back in the 1970s for less than $12,000 then watched in awe as the same property sold for well over one million dollars.

This has led to some to dub this the assetocracy, a new term that refers to a group of people who have become wealthy primarily through the ownership of assets, such as real estate (property), shares, and other investments. In New Zealand, this phenomenon has been largely driven by the housing boom, which has turned many modest-income homeowners into unexpected millionaires.

Over the last two decades in particular, the housing market in New Zealand has experienced an unprecedented boom. The average house price in New Zealand is now $920,366 according to QV. In 1980, that figure was just $25,500. In that time housing prices have become over 36 times more expensive – and one thing is for sure – salary growth has not matched that rate. This has resulted in a significant increase in the wealth of homeowners, who are now sitting on valuable assets they can sell or borrow against if needed.

A Dot loves Data analysis shows that more than 45% of homes in New Zealand were worth more than one million dollars in 2022. As Stuff reports, “In the United States, six million homes (8%) are valued at over $1m. In Australia, it’s 25%.” Yet in New Zealand we have over 45% - that figure is astounding.

In fact, when measuring in US Dollars – to conduct an international comparison – New Zealand is near the top of the list if measuring the number of millionaires by country as a percentage of the adult population, according to 2022 data from Credit Suisse. A full 9.6 percent of us are classed as US Dollar millionaires, that’s 347,000 Kiwis!

The Assetocracy

One thing is for sure: the rise of the assetocracy is a trend that is unlikely to go away anytime soon. As such, it is important for all Kiwis to be aware of this phenomenon, and what to do to make informed decisions about our finances.

Negative Impacts

While this may sound like great news for many of us, there are also concerns about the impact of the assetocracy on the economy and society. For one, the housing boom may have widened the gap between the haves and the have-nots, making it more difficult for young people and low-income families to enter the housing market.

Even so, surely younger generations shouldn’t begrudge those who were frugal and made wise financial choices over many years to build up wealth? But, as Tasmyn Hilder, director of Dot Loves Data explains it: “the surge in housing values has turned many homeowners into millionaires, but on the flipside it has now pushed homeownership [seemingly] out of reach for many other Kiwis.”

While the children of these unexpected millionaires may expect to inherit life-changing amounts, the costs of long-term care for the elderly can quickly eat away at those possible inheritances.

Even if the rise of an assetocracy hasn’t caused increased inequality, among some segments of our society there is a perception of this occurring, which has the potential to create social division.


Ultimately, a comprehensive and multifaceted approach is likely to be the most effective to promote greater economic opportunity and mobility for all. So, what can be done to address the issues related to the assetocracy in New Zealand? There are no easy answers, but some potential solutions are listed below.

Productivity Boost

The foremost solution is boosting New Zealand's productivity. New Zealand is one of a small number of OECD countries with both a low level of labour productivity and low productivity growth. The most widely used measure of productivity (labour productivity) takes GDP and divides it by hours of work – and we score below the OECD average on it as a country. By increasing productivity, we can create better jobs, increase wages, and drive economic growth.

It might be difficult to swallow that Kiwis, who pride themselves on good old “Kiwi ingenuity” compare so badly with similar developed countries: Ireland for instance. Especially as Ireland has broadly similar features to our own country: population, geography, sporting pursuits, British history, culture, weather, and language, yet Irish workers are ranked as the most productive in the world! Since 2010, Ireland’s labour productivity has increased by more than 65%, New Zealand’s had increased by just 8%. A recent report from Xero noted:

“The Irish are world leaders when it comes to GDP productivity per hour. For Aotearoa to match this output at our current productivity rates, Kiwis would need to work an additional 10.7 hours per day, or a jaw dropping total of 53.4 hours per week.”

Obviously this is impossible, but it prompts the key question - what must New Zealanders do to bridge this gap and accelerate productivity? Here’s a couple of thoughts:

  • Embrace the digital revolution by promoting innovation and research
  • Seriously invest into infrastructure to enable economic growth
  • Tax reform – Ireland has one of the most attractive corporate tax regimes in the world, so major multinationals including Microsoft, Apple, Oracle, Facebook are all based there.

By increasing productivity, New Zealand can also become more competitive in global markets and attract more foreign investment. Ultimately, boosting productivity will help to create a more balanced economy, where everyone has a chance to share in the benefits of economic growth. It could also encourage investment into non-property assets too!

More Taxes

Some have suggested new taxes on those perceived as wealthy. Most of these seem to be taxes of envy rather than solving the fundamental issue: as a nation we can’t tax ourselves wealthy.

While we all need to play our part in a vibrant society – including by chipping in tax for the public services we all benefit from such as police, defence force, and firefighters – most of these suggested taxes would in fact make things even worse. For example, in France a wealth tax contributed to the exodus of 42,000 millionaires between 2000 and 2012, among other problems – so this tax was nearly totally unwound. Just imagine the state of the economy in New Zealand if we lost such a large proportion of our best and brightest to more tax-friendly places such as Ireland!

More Housing

A clear solution is to increase the supply of housing, removing some of the benefit to property investment: such as limited supply. Increasing supply could be achieved through a combination of measures, including:

  • Incentives for private developers to build affordable housing
  • Government-funded construction of social and affordable housing (admittedly this has already been attempted with KiwiBuild)
  • Reform of the antiquated planning system to make it easier to build more homes.

Reduce Regulations

It’s not just housing planning regulations which need an overhaul: reducing regulations that stifle innovation and make it difficult for businesses to operate could help promote entrepreneurship and increase competition in the marketplace. This, in turn, could lead to increased job creation and economic growth, which can help reduce income inequality.


Better education is also crucial in addressing the issues related to the assetocracy. This could be two-fold:

  • Educating young people about financial literacy, indulging the importance of saving and investing, as well as providing resources for people to learn about the risks and rewards of investing in property and other assets. Promoting financial literacy can help individuals and families better manage their money and build wealth over time.
  • Modernising education and skills training to be more relevant to the digital age – degrees which take years to earn are becoming redundant when the world is moving so fast. Over the long term this could transform the New Zealand economy from its current focus on primary industries (farming, horticulture, and forestry) to the Irish model: focussed on technology and services.

The Bottom Line: The Reality of an Assetocracy in New Zealand

At the end of the day, the assetocracy is not necessarily a bad thing. It has created new opportunities for many Kiwis to build wealth and secure themselves financially.

But what will the future of housing and asset prices look like in New Zealand? Who really knows! For most individuals and families, it shouldn’t really matter. The solutions listed above are all outside of any one person’s control, so the important thing is to stay focussed on where you want to be and the practical steps you need to take to get there. When it comes to asset prices, remember that asset prices can go up or down – so don’t let your financial decisions be dictated by fear or greed or even by wider issues across society.

However, knowing trends and background information is still important when it comes to making good financial choices. Stay focussed on what you can control, and the actions you need to take. Then, one day you’ll find yourself with all the assets you need to live the life you really want!

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