"Whatever people are thinking about the wider economy has not flowed through to sentiment about their own finances, which is ultimately more relevant to the spending decisions they make," Delbruck said. "Households' assessment of their own financial situation remains cautiously optimistic overall, with slightly fewer saying their finances had improved [a net 2.1 per cent, down from 2.7 per cent] but slightly more expecting them to get better over the coming year [a net 11.5 per cent, up from 10.6 per cent last time]," he said.
A net 31.5 per cent said it was a good time to buy a major household item, up from 28.3 per cent in March and above the historical average.
More said they would spend a $10,000 cash windfall on a holiday, while the proportion who said they would save it or use it to pay down debt is at a 15-year low.
On the other hand the net balance saying they had increased their spending on entertainment and eating out fell from a six-year high in March back to where it was last September.
"The survey suggests the impact of rising interest rates on consumers has been minimal to date - perhaps reflecting the fact that borrowers have had the opportunity to fix their mortgages at favourable rates," Delbruck said. "The Reserve Bank will be ... feeling validated in its decision to signal more rate hikes to come."
Lower confidence was concentrated in smaller cities and rural areas. The main centres, especially Auckland and Christchurch, have experienced the strongest house price gains while those more immediately exposed to the rural economy may have taken more account of a 26 per cent drop in dairy export prices since February.
The Real Estate Institute yesterday reported a further deceleration in house price inflation, its stratified housing price index up 6.5 per cent nationwide in the year to May, compared with 8.5 per cent in April. Auckland house prices rose 9.2 per cent over the year but that was down from 15.2 per cent recorded in April, while Christchurch slowed from 13.6 per cent to 9 per cent.
The survey
*Quarterly survey's index eased half a point to 121.2 from March levels.
*Any level above 100 indicates more optimists than pessimists.
*A net 30.8 per cent expect good economic times over the year ahead - the second highest reading in 10 years.
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