Big‑ticket buying sours even as inflation fears persist
New Zealand consumer sentiment stumbled in February, with the latest ANZ-Roy Morgan New Zealand Consumer Confidence index dropping 7.1 points to 100.1 and largely reversing January’s sharp bounce. The result leaves confidence only marginally above its long‑term average, signalling households remain cautious about their finances and the broader economy.
Confidence in future conditions and current finances weakens
The survey shows both current and forward-looking measures deteriorated. The “future conditions index made up of forward-looking questions fell from 113.5 to 106.9, close to its November 2025 level,” while the current conditions gauge dropped from 97.7 to 90, slipping below late‑2025 levels.
Households are feeling noticeably worse off than a year ago. Net perceptions of current personal financial situations fell 10 points from -6% to -16%, with just 27% of respondents saying they are “better off” financially than this time last year, compared with 43% who say they are “worse off” financially.
The outlook is cooler too. A net 20% of respondents expect to be better off this time next year, down 9 points, as 42% expect to be “better off” versus 22% who think they will be “worse off” in 12 months’ time.
Big-ticket spending and housing expectations ease
The key retail indicator also softened. “A net 4% of respondents think it’s a bad time to buy a major household item,” with 38% calling it a good time and 42% a bad time. That pushes the series “back in the red after recording its first positive read in 4 years last month”, although it remains well above year‑ago levels.
Economic outlook views weakened, with the 12‑month measure sliding 7 points to -8%, while the five‑year outlook eased to +8%. House price inflation expectations dipped from 3.7% to 3.6%, though Wellington bucked the trend, rising from 2.5% to 3.6%.
Two‑year‑ahead CPI expectations were “little changed, up 0.1 ppt to 4.7%”, broadly in line with current annual food price inflation, underlining that inflation concerns remain firmly on consumers’ radar.
Against that backdrop, at its February review, the Reserve Bank kept the OCR at 2.25%, signalling it is willing to sit tight while inflation drifts back toward the middle of its 1–3% target band. Business sentiment is also easing, with Westpac noting February’s ANZ Business Outlook survey showed confidence slipping as inflation and potential rate hikes re‑emerge as key risks.
See the full ANZ-Roy Morgan report here.
Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.
