Confidence survey sees good times ahead

Consumer confidence lifted in September as house price expectations hit a new high.

The ANZ- Roy Morgan consumer confidence index rose to 121 this month from 117.7 in August. A net 31 per cent of respondents expect to be better off financially in a year compared with 25 per cent a month earlier.

Consumers were also more optimistic in their 12- month outlook for the wider economy, with a net 12 per cent expecting good times, up from 5 per cent in August, while over five years a net 14 per cent see more good times, compared with 10 per cent.

The current conditions index fell 0.2 points to 124.1; the future conditions index rose 5.6 points to 119.

“The economy continues to bear fruit so it’s of little surprise to see consumer confidence growing,” said ANZ Bank economist Cameron Bagrie.

“Consumers are feeling more confident about the future as well as remaining upbeat about the here and now. House prices have a rosy tint and dairy prices are coming into bud. While a strong [ NZ dollar] may be a negative for exporters, it’s propagating cheaper prices for consumers.”

The survey of 1000 people showed people expect house prices to rise an annual 6.3 per cent in the next two years, a new high. Auckland house price expectations, which dropped to 5.5 per cent in August from 8.4 per cent a month earlier, recovered in September, rising to 7.1 per cent. House price expectations in Canterbury also rose, up to 6 per cent from 3.7 per cent a month earlier.

A net 38 per cent of respondents think it’s a good time to buy a major household item, up one percentage point from a month earlier, while inflation expectations rose to a 3.6 per cent annual pace from 3.4 per cent in August.

Figures released by Statistics New Zealand on Thursday showed annual gross domestic product growth accelerating to 3.6 per cent, while earlier data showed unemployment had fallen to 5.1 per cent, and ANZ’s Bagrie said real GDP growth of 4 per cent was in prospect.