New Zealand consumer confidence dropped back to long-run averages in April as consumers grew less optimistic about their financial futures.
The ANZ Roy Morgan consumer confidence index fell 7.5 points to 120.5 in April, slightly above the historical average. The current conditions index dropped 5 points to 123.1 while the future conditions index fell 9 points to 118.7.
Of the survey's 1,005 respondents, a net 13 per cent saw good economic times in the coming 12 months, down from a net 25 per cent in March, and the five-year outlook dropped 7 points, with a net 18 per cent seeing good times ahead.
A net 9 per cent of respondents felt they and their families were better off financially than this time last year, from a net 16 per cent in March, and a net 25 per cent expect to be better off financially a year from now, down from 34 per cent.
"A strong labour market, low interest rates and a steady housing market are supporting sentiment. Nonetheless, consumers appear to be feeling a little less bullet-proof, with a more historically typical degree of wariness of what the future may bring, despite still-strong perceived current conditions," said Sharon Zollner, chief economist at ANZ Bank New Zealand.
"Overall, the data is still suggesting decent consumption growth but is consistent with our expectation that household saving rate will gradually lift – which would be a good thing in our view, in light of elevated household debt levels."
A net 37 per cent of those surveyed said it was a good time to buy a major household item, down from 39 per cent in March, which ANZ said remained strong and bodes well for durables spending.
Respondents expected house prices to rise 4.1 per cent per year over the next two years, up from 3.5 per cent the previous month, with house price growth expectations highest in Wellington at 4.9 per cent. Prices were generally expected to rise 4 per cent per year over the next two years, from 3.4 per cent in March.
"Household inflation expectations are very volatile. But we'll be watching next month's outturn with great interest to gauge whether the April lift is just another short-lived spike or possibly the start of something more meaningful," Zollner said.