Friday 16th September 2016
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New Zealand 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 percent of respondents expect to be better off financially in a year's time compared to 25 percent a month earlier.
Consumers were also more optimistic in their 12-month outlook for the wider economy, with a net 12 percent expecting good times ahead, up from 5 percent in August, while over a five-year horizon a net 14 percent see more good times, compared to 10 percent.
The current conditions index dropped 0.2 points to 124.1 while the future conditions index increased 5.6 points to 119.
"The economy continues to bear fruit so it’s of little surprise to see consumer confidence growing," ANZ Bank New Zealand chief economist Cameron Bagrie said. "Consumers are feeling more confident about the future as well as remaining upbeat about the right here and now. House prices have a rosy tint and dairy prices are coming into bud. While a strong NZD may be a negative for exporters, it’s propagating cheaper prices for consumers."
The survey of 1,000 people showed people expect house prices to rise an annual 6.3 percent in the next two years, a new high. Auckland house price expectations, which dropped to 5.5 percent in August from 8.4 percent a month earlier, recovered in September, rising to 7.1 percent. House price expectations in Canterbury also rose, up to 6 percent from 3.7 percent a month earlier.
A net 38 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 3.6 percent annual pace from 3.4 percent in August.
Figures released by Statistics New Zealand yesterday showed annual gross domestic product growth has accelerated to 3.6 percent while earlier data showed the unemployment rate has fallen to 5.1 percent, and ANZ's Bagrie said real GDP growth of 4 percent was in prospect.
"At that pace, the economy will eat into spare resources," Bagrie said. "Skill shortages will become an increasing challenge for businesses. But that is a better problem to have than insufficient sales and it should push wages higher, another positive for consumers."
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