Mortgage holders still cautious despite brighter Kiwi confidence
New Zealand consumer confidence has started the year on a stronger footing, offering a cautiously encouraging backdrop for Kiwi mortgage advisers.
The ANZ‑Roy Morgan New Zealand Consumer Confidence index lifted from 101.5 to 107.2 in January, the highest level since August 2021, signalling households are feeling better about both current conditions and the year ahead.
The upturn comes as Prime Minister Christopher Luxon pitches that “the recovery has now arrived” ahead of the 7 November election, while opponents argue many Kiwis are still waiting to feel it.
Current finances stabilising, optimism building
Both the current and future conditions indices posted solid gains. The future conditions index climbed from 108.9 to 113.5, the highest since May 2021, while the current conditions index jumped from 90.4 to 97.7, its best reading since December 2021.
Net perceptions of current personal finances improved sharply, with the share of New Zealanders saying they are better off than a year ago rising and those worse off falling.
The survey notes the lift in confidence “is based on the experience here and now rather than hopes”, but sentiment about the outlook is also improving. A net 29% of respondents now expect to be better off this time next year, the strongest “hope” reading since April 2021.
Big‑ticket spending turns positive, but mortgage holders lag
Crucially for the real economy, the key retail indicator has finally flipped back into positive territory. A net 1% of New Zealanders think it’s a good time to buy a major household item – “the first time it's been net positive in nearly four years” and “the first positive result for this index for four‑and‑a‑half years since August 2021”.
However, the survey also shows a clear divide between those with home loans and those without.
“Mortgage holders remain more cautious, and their enthusiasm increased by less in January,” ANZ-Roy Morgan said.
House price and inflation expectations still elevated
Amid improving industry sentiment and growing expectations of modest price gains, house price inflation expectations eased slightly from 4.0% to 3.7%, with Wellington lagging at 2.5%, while two‑year‑ahead CPI inflation expectations held at 4.6%.
With expectations still above the current official CPI inflation rate of 3.1%, rate‑cut timing and funding costs remain key watchpoints for advisers.
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