Households are still taking time to truly believe that the Reserve Bank's efforts to get inflation back into the 1% to 3% range will succeed.
According to the latest quarterly Household Expectations Survey for the RBNZ, kiwi households see inflation at 3.6% in two years' time - which is an unchanged result from the previous survey. The detailed rundown on the survey by the RBNZ is here. (All the figures quoted here are 'mean' figures).
Actual annual inflation as measured by the Consumers Price Index (CPI) for the March quarter came in at 4.0% down from 4.7% - and the RBNZ's forecasting it will go under 3% by the September quarter of this year.
But the households are still not really buying it. In terms of one-year out inflation, they see it as likely being 5.3% - and that's up from 5.1% in the previous survey.
Slightly more encouraging for the RBNZ is the five-year-out expectation, which at 3.0% is down from 3.6% from the previous survey.
And also slightly more encouraging is the fact that householders worries about meeting housing commitments has receded after spiking in the previous quarter.
Households now rate a 12.3% chance of not making a mortgage payment in the next three months, down from 17.3% in the previous quarter.
And households now give a 16.9% chance of not making a rent payment in the next three months, down from 18.0%.
The chances of losing a job in the next 12 months have, according to respondents, increased just slightly to 22.2% from 22.1% - but the percentage chance of finding a new job in the next three months if the current job is lost have receded quite sharply to 44.5% from 50.8%.
Households have trimmed back their expectation of house price rises in the near term. They now see prices 3.4% higher in the next 12 months down from 4.2% in the previous quarterly survey.
The RBNZ Household Expectations Survey was re-developed in the first quarter of 2022 and renamed to Tara-ā-Whare - Household Expectations Survey.
The data for this report was collected by Research NZ on behalf of the RBNZ. Fieldwork for this survey was conducted between April 17 and 25, 2024. The sample size for this quarter’s survey was 1,007. The survey is conducted online and is made up of a nationally representative sample of New Zealand residents aged 18 and over.
6 Comments
Households now rate a 12.3% chance of not making a mortgage payment in the next three months, down from 17.3% in the previous quarter.
That is going to make some Interest commenters cheering on mortgagee sales and the housing crash, very upset.
Why would a central bank ask a bunch of people who know nothing about economics or the fundamentals of inflation what their inflation expectations are?
It's like aircraft engineers asking the passengers of an airplane when the best time to service the engines would be.
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