Thursday 18th August 2016
|Text too small?|
New Zealand consumer confidence dipped in August with respondents expecting house price growth to slow, particularly in Auckland.
The ANZ-Roy Morgan consumer confidence index slipped to 117.7 last month from 118.2 in July. A net 25 percent of respondents expect to be better off financially in a year's time, compared to 29 percent a month earlier. They were slightly more optimistic about their 12-month outlook for the economy, with a net 5 percent expecting good times ahead, up from 4 percent in July, while over a five-year horizon a net 10 percent see more good times, compared to 13 percent.
The current conditions index gained 1.8 points to 124.3 while the future conditions index decreased 2.1 points to 113.4.
“The economic choreography looks respectable so it’s of little surprise to see consumer confidence holding at elevated levels,” ANZ Bank New Zealand chief economist Cameron Bagrie said. "Our confidence composite gauge (combining business and consumer sentiment) continues to flag solid-to-strong GDP growth over the coming months. Three to four percent real GDP growth is on offer. That would mark the sixth year of economic expansion."
The global dairy price recovery is helping mitigate the key risk to the economy of low dairy incomes, Bagrie said, while the strong kiwi dollar is a boon for consumers but a headwind for exporters.
The survey of 1,002 people showed a net 37 percent 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 3.4 percent annual pace from 3.3 percent in July.
Respondents expect house prices to rise more gradually, with consumers predicting an annual increase of 5 percent over the next two years, down from 6.1 percent a month earlier.
ANZ's Bagrie said this fall was largely due to Auckland, where expectations eased from 8.4 percent to 5.5 percent.
"While tighter loan-to-value ratio restrictions have yet to be enacted in a formal sense, they are being applied immediately and we may be seeing some early response," Bagrie said. "That said, the fact it was Auckland alone where house price expectations eased up suggests local factors are at play. After surging so far, Auckland’s housing market needs to consolidate. Either way, it will be welcome to the Reserve Bank, but whether it is the beginning of the housing boom finale remains to be seen."
No comments yet
Fonterra rivals fear dairy giant will get leg up from law overhaul
Wellington Drive remains in the black as it raises operating forecast
OMV plans further maintenance at Pohokura
Sky continues sports drive with extension to netball rights
Apple's asset-shuffling puts $270m value on PowerbyProxi
Fonterra lifts payout forecast on improving global dairy prices
22nd October 2019 Morning Report
NZ dollar hovers near 64 US cents in favourable risk environment
Broader review powers eyed for Climate Change Commission
MARKET CLOSE: NZ shares edge lower as global ructions weigh; Tourism Holdings sinks