The company's chief investment officer, Cameron Watson, said the falling value of property and shares, along with declining investments such as fixed income and managed funds, saw net household wealth fall from $396,000 to $351,000.
There had been few hiding places.
"Even those who invested in cash have received an after-tax real return of virtually zero, given inflation was extremely high this year at 5.1%."
The result was lower wealth so therefore lower spending, already evident by lower retail sales and building activity, and gross domestic product falling 0.3% in the March quarter, 0.2% in June.
Mr Watson expected a similar decline for the September quarter.
He said 2009 would be difficult on the back of agricultural incomes coming off their peak, falling tourism numbers and tighter credit conditions.
But he took solace from the fact that, traditionally, markets turned before the economy.
"Any glimmer of hope that the economy may be reaching a nadir will see the market stabilise and begin to recover."
The other glimmer of confidence came from the fact markets with a bleak outlook had an average lifespan of 12 months.
The current bear market was already "long in the tooth", peaking 13 months ago.
Despite these difficulties, Mr Watson said he believed there would be some gains for the economy.
His nine picks for 2009 were:The sharemarket to bottom out in the first half of 2009.
The global banking crisis would be contained.
House prices to stabilise.
Interest rates to fall, with the official cash rate reaching 4.5% by June.
The New Zealand dollar to fall further, and bottom out at US48c.
Inflation to fall to under 1% by the end of 2009.
The Government to introduce further economic policies to enhance productivity.
Wall Street regulations to be tightened dramatically in the United States and tax cuts for middle income earners.
Central banks to factor house prices and share prices in the consumer price index inflation calculations.
