28 Aug 2020

Consumer confidence in stark contrast to housing confidence

1:45 pm on 28 August 2020

The post-lockdown honeymoon appears to be over as the latest Covid-19 restrictions knocked consumer confidence back to levels seen during the Global Financial Crisis.

Close up of a customer hand paying with a contactless credit card reader in a bar

Photo: 123RF

The monthly ANZ-Roy Morgan Consumer Confidence Index is at 100.2 for the month, down 4 points on on July's result.

The index's historical average is 120.

The proportion of households which thought it was a good time to buy a major household item slipped to recessionary levels.

"While we have seen a sharp bounce back [out of the first lockdown] it's been incomplete and it's only bounced back to levels consistent with recession," ANZ chief economist, Sharon Zollner said.

She said the fall in consumer confidence was in stark contrast to ASB bank's latest housing market survey which showed confidence at an eight year high .

"It is a little bit ironic that the ASB Housing Confidence Index showed that people are feeling more confident about buying a house, but our survey shows they're feeling less confident about buying things to put in that house."

The investment demand for housing was strong because of low interest rates, but on day-to-day level households thought it was a good time to save, Zollner said.

The proportion of people who expected to be better off financially this time next year fell another 4 points to a net 27 percent.

Zollner said she expected to see a small rebound in consumer activity when the current restrictions ease, but it would be nothing like the bounce out of the previous lockdown.