Perceptions of current financial situations eased 3 points to +7%, still its second-strongest post-COVID level.
A net 27% expect to be better off this time next year, down 4.
A net 19% think it is a good time to buy a major household item, up 1 point. This is the single best retail indicator in the survey.
Perceptions regarding the next year’s economic outlook fell 5 points to -1%. The five-year outlook rose 3 points to +18%.
House price inflation expectations were little changed at 5.9%, a historically high level. They fell in Auckland, Wellington and Canterbury, but lifted in the North Island outside of Auckland and Wellington.
CPI inflation expectations eased 0.3%pts to 4.4%, staying in its new, higher range.
House price inflation expectations peaked in February at 7.5%, and have since retreated to 5.9%, but there is no obvious step impact from recent tax policy changes.
Households continue to report much more caution about buying a major household item than very strong house price inflation expectations would suggest. This self-reported wariness would normally be a reliable indicator of relatively weak retail sales, but people have in fact been maintaining high levels of spending, as confirmed by the recent March quarter data. This likely reflects substitution of nice things for overseas holidays, plus the housing boom, but very high levels of household debt do sound a note of caution regarding how long this dynamic might continue.
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