Rising cost of living starting to bite — survey
There are increasing signs of the tougher economic climate starting to hit Kiwis, with new research revealing 60 per cent of those surveyed have changed the way they manage their day-to-day expenses.
The annual research carried out by Kantar on behalf of share trading platform Sharesies found nearly half of those surveyed said that after covering expenses they had only a little money left to spend, save or invest and over a third had reduced their spending on food and groceries.
Sharesies co-chief executive Leighton Roberts said it was the first sign he had seen of a change in sentiment.
“We have been talking in the financial sector for some time about how things are going to get tight for people with inflation and with interest rates increasing.
“But this is probably the first survey I have seen where people are actually saying they are feeling it.”
About two-thirds of those surveyed said they were concerned about the future of New Zealand’s economy with only about a quarter (26 per cent) hopeful things would get better in the next year.
Despite the downbeat sentiment and tightening of spending, the research found 46 per cent were happy with their current personal financial situation.
The research surveyed 1000 people from the general public and 600 Sharesies users. It found 45 per cent of Sharesies users still planned to increase their investment through shares despite the tough year for sharemarkets. Roberts said they still had 1700 people sign up to use the platform last week.
“We are still getting really strong sign-ups through. People who were investing are still doing the regular amounts. We are getting less of those big one offs.”
The research found a lack of disposable income was still the highest barrier to investing for a third of those surveyed.
The percentage of people who had bought shares in the past six months was 28 per cent compared to 25 per cent last year.
But Roberts said Sharesies users were becoming more risk-averse and moving from technology stocks into exchange-traded funds.
He said previously there had been a “buy the dip” mentality coming through from users.
“This time the term being used was more people being prepared to ride out lows. That’s quite a big change as well in people thinking about this.”
Roberts said that change of view was likely a combination of education alongside people feeling like this dip may take a while.
“Realisation this isn’t March 2020 where the sentiment came in so quickly to come in and buy and now it’s not quite like that.” He said it was still promising that people said they were prepared to ride out the lows and that it was still a good time to invest.