New Zealand consumer confidence, as measured by the ANZ Roy Morgan Consumer Confidence Survey, has risen again in January, with the rise mostly attributed to the booming Auckland region.
The index figure for January was 118.3, up from 114.7 in December. An index above 100 means that New Zealanders are more optimistic than pessimistic about the future. However we are still far off the level of confidence of 2007.
This rise in confidence is strongly correlated with financial security. The more financially secure we are, the more confident we are about the future.
Regionally, the survey found strong consumer confidence growth in Auckland with respondents recording a record 2.5 year confidence high. According to Barfoot & Thompson, the average Auckland house price has increased from $543,100 in 2011 to 584,700 in 2012, a rise of 7.7%.
Confidence in the housing market is particularly high and the demand for investment properties is buoyant. The losers in this market are young adults and young families who can’t afford to purchase their first home at these current market prices.
Thus, even though the overall level of consumer confidence is rising, there are a large number of young struggling because house prices are too high for them to purchase their first home.