Summer spenders: Confidence at 21-month high

New Zealanders look set to open their wallets in 2017, with the number of households believing it is a good time to buy a major household item hitting a 21-month high.

The ANZ-Roy Morgan consumer confidence survey for January rose 4.2 points to 128.7, the strongest reading in overall terms since April 2015.

After stripping out seasonal adjustments, to adjust for the fact that people tend to be more positive in summer every year, the increase was 0.3 points.

The survey of 1000 people found a strong indications of consumers willing to spend. Asked if now was a good time to buy a major household item, a net 49 per cent said yes, the highest since April 2015.

The net scores are the difference between those who said it was a good time to buy and those who said it was a bad time.

Expectations about the housing market, while still positive, are easing. While 68 per cent of those surveyed expect house prices to increase in the coming two years, this was down from 70 per cent in December, and from 80 per cent in June 2016.

Meanwhile the expected rise is slowing, with those surveyed tipping house prices will increase by 4.3 per cent in the next 12 months, down from about 6 per cent in mid2016 to the lowest level in 11 months.

Expectations for an increase are strongest in Auckland at 4.6 per cent, just ahead of Wellington at 4.5 per cent, with expectations dropping in the capital by 1.9 percentage points in a month.

ANZ chief economist Cameron Bagrie said there were reasons for consumers to feel good, with an improving job market, low inflation and an improved outlook for the dairy sector.

‘‘Barring a storm offshore, it is the behaviour of households that will determine the path of the New Zealand economy from here,’’ Bagrie said. ‘‘Happy households are of course a good thing, but over-exuberance in terms of borrowing and spending would … up the ante on the risks of a boombust scenario.’’