RBNZ rate outlook steadies as expectations stay anchored
Investor confidence improved in the September quarter, with ASB’s latest Investor Confidence Survey showing net confidence rising to 10%, up from 1% in the second quarter.
Auckland recorded the strongest sentiment at +16%, while confidence in the rest of New Zealand lifted to 7%.
ASB senior economist Chris Tennent-Brown said the lift reflects recovering markets, even as the housing sector remains subdued.
“Investor confidence has improved," Tennent-Brown said. "Markets have recovered since the volatility we had earlier in the year, and that’s impacting sentiment positively now, but the flat housing market and lower term deposit rates continue to weigh on the mood.”
The improvement comes as inflation expectations remain stable, with ASB noting RBNZ can continue easing the OCR thanks to “contained inflation expectations", despite recent CPI volatility.
Global uncertainty still top concern
For the second quarter running, global political uncertainty remains the biggest concern for investors, with 90% citing it as a key factor.
However, fewer investors say they are “very or extremely concerned", and more are choosing to keep portfolios unchanged.
“What we’re seeing is that investors are becoming more accustomed to uncertainty… most are choosing to stay the course and not make changes to their portfolios, even as global headlines continue to shift,” Tennent-Brown said.
Housing loses its shine – especially among younger Kiwis
Perceptions of the family home as the best returning investment fell to 15%, the lowest level since ASB began tracking the measure in 2015.
Tennent-Brown said sentiment is shifting, particularly among younger New Zealanders.
“Perceptions about housing being the place to generate the most wealth are very low for under 30s… a stark but understandable contrast to the over 60 participants, whose wealth may be tied up in property,” the ASB economist said.
Under-30s are increasingly looking to other asset classes, with confidence in the sharemarket jumping to 21%, up from 13% last quarter – the strongest lift across any investment type.
Managed funds and KiwiSaver hold steady
Managed investments remained stable at 14%, while KiwiSaver has now overtaken rental property and term deposits in perceived return potential. Public shares also strengthened, with confidence rising to 12%.
Traditional favourites such as rental property and term deposits remain steady but are no longer the standout performers they once were.
Outlook: 'Cautious optimism' says ASB
Tennent-Brown said the mood is improving, but underlying risks remain.
“Looking ahead, the overall message is one of cautious optimism," he said. "While confidence has edged up, the underlying drivers of uncertainty, like global events, policy changes, and a sluggish property market, remain.”
ASB’s latest inflation analysis reinforces that view, with the bank expecting a further OCR cut in November and signalling the RBNZ “would be well placed” to lower rates again in 2026 if the economy needs support.
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