Households outlook glum but slightly less so

While the online quarterly Household Expectations Survey of about 1,000 households nationwide revealed a pessimistic outlook, the figures have actually decreased with the reported chance of missing a rent payment down 3.4 percentage points from last quarter.

Households think house prices will rise 0.6% over the next year and by 6.2% in five years, which is up from 4.4% last quarter, but lower than a 7% expectation a year ago.

They are expecting a 6% hike in wages over the next 12 months, up from 5.8% in the last survey. This question is only put to the employed and 45.3% of survey respondents think their earnings will increase, a 3.9% rise compared to the last quarter of 41.4%. In turn, the proportion of people who expect their wages to remain unchanged dropped by 4.7 percentage points to 47.2%.

Short-term and medium-term inflation expectations remain high, but long-term remains within the Reserve Bank’s target range of 1-3%. On average households expect 7.4% inflation in a year’s time, although it was at a peak of 7.3% last year and fell back to 6.7% at the March quarter.